As we reflect on 30 years of democracy, the transformation of the asset management sector stands as a powerful testament to progress. What was once a field with few black asset managers has evolved into one characterised by increased diversity, with broad representation across the sector. This transformation has not only fostered a more inclusive workforce but created a dynamic and competitive environment that benefits the entire industry.
Research has shown that investment teams with balanced diversity deliver superior returns. Teams composed of individuals from different backgrounds exhibit “cognitive diversity”, where the combination of their varied experiences, beliefs, and perspectives leads to faster and more effective problem-solving.
Such positive transformation and growth do not happen by chance. Sixteen years ago, 27four launched the BEE.conomics survey, laying the groundwork for the asset management sector to assess its demographics and work towards greater inclusivity. However, until now, investors seeking a reliable, standardised tool to evaluate diversity, equity and inclusion (DEI) in the sector have lacked one.
In response, 27four has developed a DEI Index, a pioneering framework that allows investors to measure asset managers’ DEI performance across several key dimensions: ownership; representation in decision-making roles; pay equity; equal opportunity and career advancement; stewardship activities; assets managed by diverse teams; non-discrimination and sexual harassment; and governance.
Beyond merely reporting numbers, the 27four DEI Index evaluates asset managers based on their ability to achieve genuine diversity
This index, combined with a comprehensive annual study of the South African asset management industry, has evolved into the DEInvest Annual Survey, succeeding the original BEE.conomics survey and reinforcing 27four’s leadership in driving meaningful transformation across the sector.
The 93 asset managers that participated in the maiden DEInvest 2024 Survey — including industry leader Ninety One, which manages more than R3-trillion — collectively oversee a remarkable R8.42-trillion in assets. With representation from all major players, the survey offers a precise and comprehensive overview of the industry’s scale. The data highlights a diverse and resilient market, encompassing large, established firms, mid-tier companies and smaller, specialised asset managers across both public and private markets.
Beyond merely reporting numbers, the 27four DEI Index evaluates asset managers based on their ability to achieve genuine diversity. For example, firms led exclusively by men receive lower scores in leadership diversity compared to those with a balanced representation of both men and women.
By offering a nuanced measurement of diversity without overcorrection, the index allows asset owners to assess managers’ DEI performance while providing managers with a clear benchmark to track their progress against industry standards. To thoroughly assess the integration of DEI practices, more than 340 asset manager policies were reviewed.
The survey reveals a resilient and evolving asset management industry, with regulatory factors shaping capital flows between domestic, global, public and private markets. The 2024 national elections, resulting in a government of national unity, are expected to boost interest in infrastructure projects and public-private partnerships. This political shift, along with new regulatory frameworks for patient capital, is likely to shape future investment strategies and foster stronger collaboration between the private sector and government-led initiatives, positioning the industry for growth aligned with national development goals.
While the index reflects progress in black ownership and representation, significant gaps remain in black and female leadership, particularly in key decision-making roles such as CEOs, chief investment officers and portfolio managers. Despite the broad adoption of broad-based BEE, DEI performance varies widely across firms, with some excelling while others fall behind. Gender parity is improving at junior levels, such as in analyst positions, but despite strides in achieving pay equity, challenges in promoting and retaining women remain, highlighting the need for stronger policies to support their progression.
Moreover, many firms show limited engagement in DEI-related stewardship, with minimal efforts to prevent discrimination or promote diversity within portfolio companies. Women also manage significantly fewer assets than their male counterparts.
The 27four DEI Index provides companies with a clear tool to evaluate, benchmark and strengthen their DEI practices, ensuring long-term, positive impacts on both their employees and the economy. At 27four, we remain committed to driving meaningful change and leading market evolution through innovative programmes, products, and research that benefit the broader industry.
We believe better businesses build a better country. And ultimately, it’s all about the people we serve.
The 27four DEInvest Annual Survey and DEI Index will be released on October 30 and will be available for free download at 27four.com.
• Vawda is CEO of 27four, an asset management firm
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