How to integrate diversity, equity and inclusion into your investment decisions

Embracing diversity, equity and inclusion (DEI) could provide institutional investors with new investment opportunities while helping to deliver on a firm’s overall values and objectives.
DEI has become a central pillar for investors who are seeking to align their portfolios with their overall organizational values. Investors are increasingly embedding DEI into their investment approach to help them achieve long-term sustainable returns while keeping in line with shifting investment trends.
Research shows1 that about a third of women-owned and minority-owned private equity firms are top quartile performers among private equity firms overall. This demonstrates the vital importance of securing investment returns from a range of sources, and means that investors should embrace research, advice and solutions that can help them overcome the challenges of selecting the right DEI investments.
What do we use to define DEI investments?
The manager's firm is at least a third owned by diverse person(s)
The investment committee compromises at least 50% diverse person(s)
Portfolio managers compromise at least 50% diverse person(s)
Six things to look for in DEI managers
-
1. A dynamic team with experience in the strategy and a strong firm culture
-
2. Clear strategy that the team has experience executing
-
3. Strong alignment with LPs through attractive terms
-
4. An applicable track record (when available)
-
5. Strong operational due diligence results
-
6. Positive market references
Common DEI investing challenges
Considerations for integrating DEI into investments
-
Do your DEI researchIt’s important to understand how organizations address DEI. When we research managers based on DEI considerations, we look at historically underrepresented investment objectives.
-
Get some advice from a specialistMany investors seek third party advice on all aspects of an investment strategy, including reviewing existing exposures, reviewing and developing policies, and screening and due diligence services.
-
Investigate the solutions available to youThere are options out there to help you with your DEI strategy. You could decide to fully or partially delegate your DEI investments through a third party fund or create a direct program. One of the benefits of fully integrated investment solutions is that it helps to alleviate capacity constraints on your internal team in market mapping the DEI space, while helping you seek access to top diverse managers.
Explore the power of DEI
Related solutions
-
InvestmentsWe can help you build a robust, efficient and effective governance and due diligence frameworks that are designed to position portfolios for resilience and success.
-
Investments
Governance and due diligence
We can help you build a robust, efficient and effective governance and due diligence frameworks that are designed to position portfolios for resilience and success. -
Portfolio strategies
Investment philosophy
Our investment approach is governed by a set of guiding principles across governance, risks and value - with our clients' objectives at the core.
Related insights
-
Investment trends
Mercer CFA Institute Global Pension Index 2024
We benchmark 48 retirement income systems around the world, highlighting challenges and opportunities within each. -
Portfolio strategies
Managing transition and sustainability risks
Climate change is becoming an increasingly tangible risk. Insurers are focusing on managing climate-related risks on both sides of their balance sheets. -
Investment trends
2024 Global insurance investment survey
More than 80 insurers share important insights and key investment opportunities from across the industry. Download the report to discover the findings.
Before you access this page, please read and accept the terms and legal notices below. You are about to enter a page intended for sophisticated, institutional investors based in the USA only.
This content is provided for informational purposes only. The information provided does not constitute, and should not be construed as, an offer to sell, or a solicitation of an offer to buy, any securities, or an offer, invitation or solicitation of any specific products or the investment management services of Mercer, or an offer or invitation to enter into any portfolio management mandate with Mercer.
Past performance is not an indication of future performance. If you are not able to accept these terms and conditions, please decline and do not proceed further. We reserve the right to suspend or withdraw access to any page(s) included on this website without notice at any time and Mercer accepts no liability if, for any reason, these pages are unavailable at any time or for any period.