Women, African-Americans and Latinos are proportionately underrepresented in the financial services sector in ownership and management positions, as well as in rank-and-file employment. Few hedge fund managers currently have formal structures in place to correct underrepresentation, and research shows that organizations often perceive themselves as more diverse than they actually are. In conjunction with an open-minded work climate, however, diversity can lead to a number of benefits, including stronger performance; fewer errors; increased creativity and cooperation; and greater empathy. This article, the first in a four-part series, discusses the lack of diversity within the financial services and alternative investment management industries and explains why fund managers should focus on increasing diversity. The second article will analyze diversity training; performance ratings and hiring tests; grievance procedures; and specific actions managers can take to promote diversity and inclusion. The third article will explore implicit biases, their harms and whether they can be reduced in both the short and long term. The fourth article will evaluate methods for constraining decision making and examine the role that legal and compliance leaders can take to promote diversity and reduce implicit biases. See “HFLR Program Looks at Recent Developments and Trends in Employment Law Relevant to Fund Managers” (Jul. 26, 2018).