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SBAI and ILPA collaborate on guidance for allocators looking to increase portfolio diversity

The Standards Board for Alternative Investments, an active alliance of institutional investors and alternative asset managers, has published new guidance – Helping Allocators Increase Diversity in Their Portfolios. The report has been produced in collaboration with the Institutional Limited Partners Association.

The Standards Board for Alternative Investments (SBAI), an active alliance of institutional investors and alternative asset managers, has published new guidance – Helping Allocators Increase Diversity in Their Portfolios. The report has been produced in collaboration with the Institutional Limited Partners Association (ILPA).

The SBAI and its Culture and Diversity Working Group has previously published guidance on Principles of Culture and Diversity Strategies and Diversity for Smaller Asset Managers as part of their Culture and Diversity Toolbox. ILPA brings together leaders in private equity to share best practices and perspectives on DEI through its growing Diversity in Action initiative and provides resources and tools to help all stakeholders on their DEI journeys—including through its DEI Roadmap and DDQ and Diversity Metrics Template.

Culture and diversity are central to most allocator due diligence processes. But many allocators are now actively looking to increase diversity within their portfolios by allocating to more diverse managers.

The report explores practical steps that allocators can take to improve the diversity of their portfolio. It starts with the foundations of understanding your risk tolerance and the current level of diversity in your portfolio. It then moves on to ways to expand the networks of the investment team, structural changes that could be made to the manager selection process and a consideration of whether diverse manager programmes are the best way to promote diversity.

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