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Most of the wealthiest US universities do not disclose whether they give endowment money to various asset managers to monitor.

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Only one in three of the nation’s wealthiest 50 universities have agreed to share data about their use of asset managers with diverse backgrounds to manage their endowments, according to a new report.

Results from a research by the nonprofit Knight Foundation, which aimed to assess the extent to which wealth management firms owned by women and racial or ethnic minorities play a role in managing endowment assets at the nation’s 25 wealthiest private and 25 public colleges and universities. The report, released June 30, is part of the foundation’s ongoing research series on diversity in asset management.

Only 16 of the 50 richest educational institutions agreed to participate in the survey. They collectively own 54%, or $314 billion, of the group’s total giving; The 34 institutions that did not participate hold $273 billion in assets. Of the 16 participants, only 12 schools provided asset manager data for independent analysis, while four schools self-reported statistics from their own internal analysis.

Compared to the overall wealth management industry, where nearly 99% of the $80 trillion in assets under management in the U.S. are run by firms owned by white men, the universities that participated in the study showed a greater diversity of money managers. According to a 2021 study by the Knight Foundation, only 1.4% of total assets in the US are managed by various funds. In contrast, all 16 institutions in this study had more than 5% of their assets under management in different funds.

The three largest university endowments in 2021, a boom year for the markets, were Harvard University ($51.9 billion), the University of Texas ($42.9 billion) and Yale University ($42.3 billion). in accordance with Inside HigherEd. Major endowments channel large amounts of capital into alternative assets, including private equity, venture capital and hedge funds. Overall, only 8% of higher education institutions have a clear policy for engaging with various women-owned asset management companies. in accordance with Inside HigherEd.

Among the 12 institutions that provided their lists of asset managers, only two — Princeton University and Duke University — invest more than 20% in different firms. Of the four private institutions that self-reported diversity statistics, all but Harvard had more than 20% run by firms with diverse ownership, with Stanford University using the highest percentage at 38%.

Minorities and women make up 70% of the US working population. The foundation noted in the report that measuring and monitoring their representation in university endowments will be difficult without greater transparency.

Ronald S. Parker, president and chief executive officer of the National Association of Securities Professionals, a trade organization for minorities and women in the financial services industry, said that while it’s “great to do research, now is the time to use the research and implement it’s in practice,” especially to encourage more institutions to share information about asset management.

Parker urged universities to “shed light on the opportunities that exist to be much more inclusive in these types of offerings in terms of asset management.”

Among the 34 institutions that did not share data, 18 declined to participate in the study and 16 did not respond, according to the Knight Foundation report. The foundation’s report called it “appalling and telling” that those 34 institutions chose not to participate in the study.

Parker also said it was “disappointing to say the least” that many of the universities that chose not to participate — the list includes Brown University, MIT, USC and Yale — had worked to advance areas such as athletics and research that helped to build their allotments.

“When I look at some of these universities that I know are part of major athletic conferences, that are part of R1 institutions that do tremendous research, yet choose not to disclose their interactions with all kinds of management firms assets owned by women, it just says We still have a lot of work to do,” Parker said.

He also noted that universities should be aware that prospective students and parents will also be “researching who is involved in the field and who is not” when making decisions about where to go to college. Ultimately, he said, “peers influence peers,” and he hopes the Knight Foundation will eventually see greater engagement and transparency from its 34 institutions.

“We don’t want people to disclose information to be penalized,” Parker said. “We want people to come forward because we can share best practices, ideas or solutions about how we can change that narrative.”

Ashley Zohn, vice president of learning and impact at the Knight Foundation, said the most important part of the newly released report is that the foundation was able to obtain data from 16 schools. She added that the foundation will continue to work on the study and hopes to collect enough data to publish a more complete report.

“We will continue to try to get more universities to participate, but we wanted to take a moment to highlight and celebrate those who have participated and let us know where we stand,” Zohn said.

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