In November 2019, the Alternative Investment Management Association AIMA launched its new diversity and inclusion guide to the global hedge fund industry, titled “The Alternatives”. The paper is intended to reflect the heightened focus on diversity in the industry and lists 45 practical recommendations to enhance diversity and inclusion.
AIMA has also created a new Diversity and Inclusion Steering Group, which aims to create “an environment across our industry that celebrates difference, is open to all as a career choice, and can attract a more diverse and inclusive pool of candidates”.
The guide includes the following suggested practical steps, split into the following areas:
- Laying the Foundation: secure internal buy-in into the firm’s diversity and inclusion approach and decide whether to adopt formal goals or quotas.
- Recruitment: use hiring teams or panels, rather than just one individual, focusing on the skills needed for roles rather than specific qualifications, and meeting with as many applicants as possible.
- Retention: conduct regular anonymous surveys; provide mental health support; provide training on bias and inclusion; and recognise holidays or events marked by minority groups.
- Promotion: eliminate self-appraisals; implement formal sponsorship programmes for staff identified as having leadership potential.
- External Relationships: contribute to industry-wide diversity and inclusion initiatives; work with schools, colleges and universities.
Hedge funds are increasingly taking action to harness the positive impact of greater diversity, allowing firms to attract a greater amount of talent and improve decision making processes. The guide also suggests that as the industry is having to work harder to attract the best talent, highlighting in particular the rise of the technology as a factor, greater diversity is becoming increasingly important.
It is not only the hedge fund industry shining the spotlight on the benefits of diversity – private equity and venture capital industries are also embracing change, with organisations such as Level 20 and Diversity VC committed to improving diversity and inclusion, with the support of the BVCA.
The guide recognises that the industry has many small businesses that may struggle to adopt all of its policies but underlines that, despite a hedge fund’s size and resources, there are still steps these funds can take to improve diversity and inclusiveness and the industry as a whole needs to work together and commit to making changes.