 Good afternoon, everyone. All right. Well, thank you all for coming to the first session of this afternoon's plenary. I'm thrilled to be here with my fellow panelists to moderate a really interesting discussion. And so my name is Miliana Vajosevic. I'm with the Impact Investments Group at Prudential and by way of background, we've had an impact investing mandate for over 40 years. In that time, we've invested close to three billion dollars across various impact strategies and private asset classes. And our portfolio is slated to hit one billion dollars later this year or next year. So we're very proud of that. I'm joined today by some amazing experts in their field. And I'll introduce them quickly, since we only have a short time together. But starting at my far left, a woman who needs very little introduction is Dr. Jennifer Eberhardt. She's one of the nation's leading experts on implicit bias and currently a professor in the Department of Psychology at Stanford. And a co-director of SPARC, which is a university initiative to use psychological research to address pressing social problems. She's done amazing research understanding the role of racial bias in areas such as law enforcement and also a topic we'll talk about today, which is the asset management industry. Next to Jennifer is Dr. Ashby Monk, who is the executive research director of the Stanford Global Project Center. And his research really focuses on the design and governance of institutional investors, namely pension and sovereign wealth funds. He's also a co-founder and chairman of Long Game Saving, a personal savings app that uses gamification to encourage positive financial behaviors. And I should say maybe Sir Darren Dodson, since you don't have a PhD. But this is Darren Dodson, who's the founder and managing director of Alumin Capital, which is an impact fund of funds that seeks to increase gender and racial equity within the financial market. So very pleased to have them all here. And among many things, I think the thread that unites us is we have been part of a collaborative working group that over the past three or so years has been working on the relationship, if there is any, about racial bias in the asset management industry. And we were thrilled that the survey results and the research findings were published just back in August in Penas and found some really interesting and I think evocative findings on the relationship between implicit bias, particularly around race and venture capital. And so I will first turn it over to Darren to share a little bit about the origin story of the study and really what came to light in the research findings. It is wonderful to be here with all of you. And one of the framing pieces that helps us on our journey is some research years ago that was on the $69 trillion in asset management business and the fact that women and people of color own funds and run funds that represent about 1.3% of that. So one of the things that we did and set out to do as we brought together this amazing team that's here on this stage as a looming capital is ask the question collectively, why? Why does that exist? And how can we construct its study and its experiment to help to understand why that is? And as Jennifer says, data may not fully cure a problem but it can certainly soothe many of us who are faced with the bias, systematic bias that you'll hear from other panelists about. Our work at a looming capital is of course to do this and connect and be a partner at this cutting edge research bringing together the experts like Jennifer and Ashby across their fields who have pioneered and come together to do this groundbreaking research bringing together behavioral science and also looking deeply at implicit bias social psychology and then to put that into practice in the funds that we invest in in a field of impact investing that really from the very beginning we would have hoped started with a thesis around the outperformance of women and people of color but like its older brother the broader financial system impact investing is also subject to its own biases. So that's a little bit about the why and the how we got started and I would love to move on and help the other people on the panel share their stories and origin stories as well. Sure, so for anyone who hasn't read the study I highly encourage it it's also been fairly prominently featured in various media outlets and maybe I'll turn to Jennifer and Ashby if you can just talk a little bit about what the hypothesis was going into the study and what the findings were that would be great I think for those who are less familiar to understand. Yes, I mean I think when first of all it's a pleasure for me to be here this is my first SOCAP meeting so thank you for having me. So yeah, we went into this trying to understand why you have the racial disparities that we see in the investment space especially at a time where lots of organizations are focused on diversity and they're you know concerns about sort of equity and inclusion and so forth but this is an industry that is you know it's pretty much white and male and so why is that and so one reason that people believe that this disparity exists is because of the pipeline problem right so that you don't have you know people of color or women who are you know interested or they don't have the you know connections or the capital they don't have the education or experience to you know to be a part of the industry and so they don't enter and what we were interested in is looking at the potential role that racial bias might play in all of this and you know is there you know is there evidence that there is any you know a bias there that sort of in addition to whatever sort of pipeline issues that are out there that could contribute to the disparities that we see and so we designed a study a study where we had asset allocators look at one page descriptions of venture capital teams and we systematically manipulated the race of the managing partner so with the photograph and so either that person was black or white and we also systematically vary the qualifications of the team so they were like high quality or lower quality teams and we found that the black led venture capital teams when these are highly qualified teams that they were judged to be you know they were judged more negatively basically in comparison to white led teams that were highly qualified so in terms of their expertise in terms of their ability in terms of their experience even though the information was identical and so that was one of the main findings and the other thing we found was that it seemed to be sort of this is counter to the pipeline sort of explanation for the for the disparities that we see it seemed to be the case that the more qualified the black led teams were the more bias they faced and so that was another noteworthy finding so I think maybe I'll be biased myself and say it's safe to say that we probably assumed there was bias in asset management so I think that was probably indisputable going in I'm curious to hear from all of you and I think Ashby I'll start with you given that you have such a great network of institutional investors that you worked with were you surprised at all or were there nuances or aspects of the study that did surprise you and then I'd love to also hear Jennifer and Darren chime in either from your other work in implicit bias or maybe lived experiences fundraising and otherwise I think it's hard to be surprised about what we found I mean in this industry it's incredibly homogenous I could probably need all my fingers and toes to count the conferences I've been to where there have been zero people of color and so I think from that perspective to see that there is this finding that racial bias exists I had somebody say to me you've proven that water makes things wet it's just so obvious that this was a problem and even with that kind of glaring aspect to the industry which is partly why I wanted to take it on as a research project I'm still surprised that we found it I lived for 20 years in this industry suspecting that we had a bias here and now 20 years in we actually have a finding that was published in a peer reviewed study the proceedings of the national academy of sciences that says you know we're not crazy part of the problem is there is an implicit bias here and that gives me hope that we can then build actions to try to unwind that bias and I think that what that also does even though I mean to Ashby's point we're not crazy it's a it's a powerful thing to go out and pitch as many of you in the room might do on a regular basis to realize that the better you pitch the more bias you face which I think is a powerful realization and that it's not your work alone to do to be awesome it's other people's work to see how awesome you are and yeah and it so it so it has the power for me after pitching about 500 times over the last two years of saying that you know together we can solve this problem you know at aluminum capital we invest into women led funds black led funds white male led funds and all of them do the work of reducing implicit bias and all of us go on a journey together with our investors to reduce that bias so that we can do the work of having those funds and it see the humanity and the underestimated returns and value that people bring to the table and do the work essentially over the 10-year process of of our investment within impact investing to help impact investing really deliver on on the process on the on the promise of outside market rate returns which it almost certainly won't if it doesn't and and Jennifer I know we haven't talked about fiduciaries yet but I think that's another powerful finding that we always talk about in the lab together as an interdisciplinary team yeah I'm curious Jennifer given that you've you've tackled this issue and explored this issue in other areas such as law enforcement was there anything that surprised you it seems like given that you're one of the leading experts in this work it's it probably was a no-brainer that the results would be something like this but was there anything that caught you off guard or did it open your eyes to something that you hadn't really thought of or really considered prior to the study coming out yeah well one of the issues that I didn't necessarily anticipate was that the asset allocators had a really hard time distinguishing between the black lead teams that were highly qualified and those that were less qualified they didn't have this problem at all with the white lead teams they could easily tell the difference between the two but with the black lead teams that was that was hard and they also were able to use the prior performance and competence of the white lead teams to make predictions about future performance and they couldn't do that so much with the black lead teams and so there was a way in which even though they're faced with the very same information just you know seeing a black face kind of turned off the thinking almost in the way that they normally thought and so they weren't looking at information you know that was sort of diagnostic of performance in the same way when you know the people the managing partner was black versus white so I think that was you know something that was somewhat surprising but then when I think about I mean there's a whole literature in social psychology in my field looking at sort of categorization and so if you're thinking about people in terms of their racial category for example it's hard to individuate it's hard to make distinctions among people within that category because you're thinking about them in terms of their race you know not in terms of what they're bringing to the table and it seemed like there was some evidence for that here and I think segwaying a bit I know we've chatted collectively as a team on what happens next and what's the call to action and the study the findings are still fairly recent having only been released in August but I know we have been collectively thinking on how do we harness the energy of these findings and really have them have the impact investing community and just the broader asset management industry take note and I was mentioning to Ash beyond the way here I don't know if anyone's tracking the news with Fisher investments I think Kenneth Fisher made some fairly sexist remarks only on October 8th they've seen a hemorrhaging of $2.5 billion in that time from namely pension funds just saying I'll take my business elsewhere and so we have an example of one disparaging comment at a conference and a flood an exodus of capital from a particular asset manager I think that's very different from saying here are findings and now lean into this and invest more in diverse teams and I imagine my hypothesis would be that the pace would be slower to invest versus divest and so I'm curious from all of you what you think the call to action is and what folks in this room can do regardless of where they sit if they're an asset owner if they sit on a board if they are an asset manager and also maybe if they're not involved at all I think the last thing we would want is people to say this is in my issue area so I'm sitting out so I'm just curious and maybe Ash be given I think you've had some great thoughts on governance structures and and how we can embed these types of learnings early in the process and in senior roles to try to make an impact yeah I spent my life studying the design and governance of these massive bureaucracies I mean I think what people forget is that there's about a hundred trillion dollars sitting in these organizations around the world it's most of the risk capital that powers capitalism but they were set up because of governments they set up because there's a tax rule or there's a rule about prefunding a pension plan so they have this weird dynamic where you have these government entities powering capitalism and if capitalism functions correctly then the money will come back and fund social welfare so the the number of challenges and unraveling how these organizations operate kind of is endless the fact that they move so quickly on Fisher is astounding these organizations never move quickly that's the first thing to know if you can make them move at all you can have a huge and profound impact on the world but getting to move quickly that was never the goal so so the the end game for me here I'll just go quickly because I see we don't have that much time but we need to tie this finding to investment performance these are organizations who have incredible bureaucracies they're fiduciary bound they live by prudent person rules and what that means is everything they do is about generating a return to pay a future welfare whatever that welfare is and anything that gets in the way with that they can shut down over the last 30 years my personal fight over 15 to get them to pay attention to climate change ran into the problem that with climate change we were asking them to reduce the investable universe by focusing on things that are green and clean and avoiding things that are dirty financial theory pushed against us in that case because financial theory says reducing the investable universe reduces the risk adjusted returns the beauty of this moment is the bias itself is reducing the investable universe so we can actually do a bit of a judo move on them and say look you may say this climate change issue is untouchable because we're reducing it and we've had to get very creative with climate in this case we don't have to get creative we can point to the existing theories and say the bias means you're not treating people of color as you should means your market is smaller it means you're leaving return on the table in order to make that then real everybody in the room needs to go to a pension fund board meeting and ask a trustee board have you seen the study what are you doing about it because they don't do anything otherwise and i know we're just about a short of time but jennifer if you have any final thoughts on how you've affected change and action and your other work and just any final advice for the audience just on how you think we can really affect change following the results here yeah i think data that's really important having sort of metrics that you can follow over time that are you can hold people accountable to to you know bias you know lives and kind of comes alive when we don't have agreed upon standards for how to evaluate you know the actions or the behavior of other people when those standards are subjective and you live in a space where there are objective standards right for you know evaluating performance and so forth and so you want to try to redirect people you know away from their intuition about who's going to be good and who's going to work out to you know actual data you know actual sort of performance metrics and so forth so i would say that and and that works whether you're looking at the investment space or if you're looking at police departments or if you're looking at you know um you know other uh you know entities even schools and even uh you know tech companies it's the same same sort of fundamental issue yeah well i'm unfortunately we're up with time but i would be remiss if i didn't mention that jennifer just published a book that uh darin is holding which is called um it's called biased uh uncovering the hidden prejudice that shapes what we see think and do um i think it's a fantastic read so for those of you interested in this work and learning more about how bias affects a range of industries and decisions uh we wholly recommend it so please join me in thanking the panelists for a widely discussed thank you