New AAAIM Study: AAPI-owned funds significantly underrepresented in US AUM despite outperformance
The Association of Asian American Investment Managers (AAAIM) today released a study of AAPI-owned funds with a spotlight on assets under management (AUM) and performance. The study found substantial AAPI underrepresentation at the ownership level ? only 2.4% of firms, 1.8% of funds, and .3% of AUM in the US are AAPI-owned. When looking at AAPI women in particular, .01% of US AUM is managed by AAPI women.
As several AAAIM studies have found, AAPIs' experience in the asset management industry is incongruent with perception that AAPIs are overrepresented in asset management. One consequence of this misperception is that AAPIs are categorized as a ?majority demographic' ? and as such are denied access or overlooked as candidates for advancement programs. In 2020, AAAIM initiated a series of research studies in partnership with Bella Private Markets under the leadership of Professor Josh Lerner of the Harvard Business School to analyze AAPI representation in the asset management industry.
Specifically, this year's study exposed:
- AAPI-owned firms and AUM are substantially underrepresented across asset classes ? AAPIs comprise between 6.1 and 20.7% of potential owners but manage an average of .3% of AUM
- Real estate has the lowest rate of AAPI ownership ? .3% of firms, .3% of funds and .2% of AUM.
- AAPI representation is low by all measures for private equity, venture capital, and public equity.
- The highest AAPI representation can be seen in hedge funds ? at 5.4% of all firms, the proportion of AAPI-owned hedge funds almost approaches that of the US population (approximately 6.1%) ? however, AAPI-managed AUM is just .8%.
- Extremely low fund ownership among women AAPIs ? the percentage of AAPI women-managed AUM is staggeringly low at .01%
- Yet, AAPI-owned funds outperform non-AAPI-owned funds across most asset classes on a capital-weighted average basis.
- Nearly half of AAPI-owned PE funds appear in the top performance quartile; over 50% of AAPI-owned VC funds achieve top quartile performance as well.
- AAPI-owned hedge funds yield monthly returns of .50%, significantly outpacing the .19% monthly returns of their non-AAPI-owned counterparts
Brenda Chia, AAAIM's board Co-Chair, comments, "There is still a glaring blind spot in the asset management industry. Despite top performance, AAPI-owned funds are managing statistically less AUM so we have to ask ourselves, why? We're witnessing the negative impact of the ?model minority stereotype' ? the idea that AAPIs are good workers but not assertive leaders. This is holding back not only AAPIs in asset management but the literal financial performance of our industry as a whole."
The study encourages the inclusion of AAPIs in the Emerging Manager programs that Institutional investors, endowments, foundations and corporate LPs are implementing to support diverse managers. AAAIM also encourages the inclusion of AAPIs in early-career programs for emerging leaders in the asset management community.
To read the complete study, please visit www.aaaim.org.
About AAAIM
The Association of Asian American Investment Managers is a national non-profit organization dedicated to increasing diversity and inclusion in the investment management industry and serving as a powerful voice for the Asian American and Pacific Islander (AAPI) community. Our goal is to elevate underrepresented groups through education, networking, and empowerment.
News published on and distributed by:
