Minority Owned Opportunities vs Fiduciary Duty percent, manager, question, fiduciary, investment

burning0spear

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Does anyone view the trend of limiting the investment opportunities of Endowment/Pension/State Treasuries by mandating a percent of investments must go to Social Responsible Investments (SRIs) and/or minority/woman owned investment firms a breach in fiduciary duty by the investment committees/manager?

I am obviously bias due to my partnership in a non-diverse alternative firm, but many of the our prospects first question in their due diligence is "Are you a minority owned investment company? Yes/No". I must speculate that if we were minority owned, our AUM would be much larger then it is today.

In my world I invest according to risk/return profile, not based on the ethnicity of company management. If only we could hold the same standards to our Federal and State government agencies/universities.

In private investments (FOF, HF, Family Office), if you want to avoid certain investments and/or concentrate on SRIs/minority owned companies, I have no issue with that. However you are limiting your investment scope, and according to the old faithful CAPM, will have a less efficient frontier.

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