Princeton University’s Office of Finance and Treasury signaled its commitment to working with minority-owned financial firms this week when it announced that it had entrusted Ramirez Asset Management of New York, part of the oldest Hispanic investment firm in the U.S., with investing 50% of its latest bond proceeds.
After the New Jersey Educational Facilities Authority (EFA) issued $430 million in facilities bonds — the largest transaction in EFA history — to the university in April, university officials say the two intentionally sought a diverse-owned firm to help manage the bond proceeds, calling it a “historic moment.”
However, the people managing that money are mostly white men, giving them a disproportionate say over hundreds of millions of dollars each year. In fact, one study commissioned by the Knight Foundation found that women- and minority-owned firms managed only 1.3% of the $69 trillion asset management industry.
That’s due to longstanding explicit and implicit discrimination, said Robert Raben, founder of the Diverse Asset Managers Initiative, which is devoted to increasing diversity within the financial services industry.
“For generations, there was an explicit belief that women and people of color couldn’t manage money,” Raben said. “And now it’s residual. It’s sort of the conventional wisdom among too many chief investment officers [CIOs], too many leaders, that women and people of color can’t do it as well.”
While Raben applauded Princeton’s Office of Finance and Treasury’s latest partnership, he stressed that it stands in stark contrast to the typical actions taken by the Princeton University Investment Company (PRINCO), a separate entity in charge of the university’s endowment.
