Practical Guidance for Advisers Seeking to Foster Diversity and Inclusion

The hedge fund industry remains “overwhelmingly homogenous in demographic terms,” according to a recent survey report (Report) issued by the Alternative Investment Management Association (AIMA). Diversity and inclusion (D&I) is rapidly becoming a business imperative. Not only are many investors asking about it, but broadening the talent pool may also help to improve investment performance by avoiding “group think” and drawing on novel perspectives and experiences. According to the Report, hedge fund managers must first lay an appropriate foundation for D&I. Building on that foundation, they can then embrace D&I in connection with hiring and promotion practices, employee retention efforts and third-party relationships. This article focuses on the practical guidance offered by the Report, with additional commentary from Michelle Noyes, managing director of AIMA. See our four-part series on diversity: “Why Equal Representation Within Fund Managers Is Essential” (Oct. 4, 2018); “Ways Fund Managers Can Promote Diversity and Inclusion” (Oct. 11, 2018); “What Implicit Biases Are and Whether Interventions Are Effective” (Oct. 18, 2018); and “How Constrained Decision Making, Along With Legal and Compliance Leadership, Can Help Reduce Fund Manager Bias” (Nov. 1, 2018).

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