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Roughly 27 percent of the external asset management firms that oversee parts of Harvard’s $40.9 billion endowment are majority-owned by women and people of color, according to a letter from Harvard Management Company’s CEO N.P. “Narv” Narvekar and Chief Compliance Officer Kathryn I. Murtagh on Friday.
The specific firms oversee approximately 26 percent of HMC’s externally managed assets.
Narvekar and Murtagh's letter comes in response to a missive sent earlier this month from U.S. Representatives Emanuel Cleaver II (D-Mo.) and Joseph P. Kennedy III (D-Mass.) to University President Lawrence S. Bacow and the leaders of 24 other universities requesting information about the diversity of their external asset managers.
Bacow, Narvekar and Murtagh responded with their own letters July 31, the deadline set by the congressmen.
“Harvard improves with each action we take in support of a more diverse and inclusive environment,” Bacow wrote. “They not only help individual members of our community realize their full potential in teaching, learning, and research, but also remove systemic hurdles that too many have had to surmount for far too long.”
“Like you, I believe that affirmative steps toward expanding opportunity for women- and minority-owned firms upholds the ideal of equal opportunity and can play a significant role in closing persistent wealth gaps,” he added.
Narvekar and Murtagh's letter listed other efforts at HMC to find women- and minority-owned asset managers, including contracting a third-party service to set up monthly introductions with diverse managers and partnering with various initiatives like the Diverse Asset Managers’ Initiative.
The letter also went into detail on how HMC selects its external managers. Candidates are rated on three categories — organizational structure, track record, and investment edge. The process yields approximately one new manager relationship per 100 introductions, and is applied to all established managers, regardless of gender or race.
Narvekar and Murtagh also wrote that 50 percent of HMC's 20 internal managing directors self-identify as women or people of color.
“Recent activism has emphasized the necessity of rapid individual and collective action to achieve lasting social change,” Narvekar and Murtagh wrote. “While no one economic actor can repair centuries of systemic racial, ethnic, and gender discrimination, each of us must do our part to expand opportunities for women- and minority-owned firms and encourage our peer institutions to do the same.”
Robert Raben, the director of the Diverse Asset Managers’ Initiative, wrote in an emailed statement that he commends Harvard’s “thoughtful” response to the representatives.
“Clearly, they are taking a new approach to how they think about minority and female participation in the endowment, which is great,” Raben wrote.
Still, he encouraged Harvard to “put out the actual numbers in detail” to reveal if most of the firms are majority-owned by white women, or people of color.
“We have no way of knowing whether African Americans and Latinos are participating in the endowment in any meaningful way; our suspicion is they are not, or Harvard would say so,” Raben wrote.
—Staff writer Camille G. Caldera can be reached at firstname.lastname@example.org. Follow her on Twitter @camille_caldera.
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