Friends,

For weeks we have been reflecting on the murders of George Floyd, Breonna Taylor, Ahmaud Arbery and countless others, and the world’s response. Despite all of the good in our country, systemic racism permeates all facets of our society. This is not new, and we want to reflect on our role in this important conversation on race.

Our firm invests in diverse-owned funds not because we have implemented a program, but because we recognize their competitive advantage. We are a diverse-owned firm and we know all that diverse-owned funds have had to overcome just to get to the starting line. We believe this is why they tend to outperform. We weave questions about diversity metrics into our due diligence process not because we have a box to check, but because we know that diversity ultimately leads to better returns. More of our clients want to ensure their investments align with their values and have impact.

Investing with diversity and inclusion in mind is a start to the solution. Black lives matter. Black talent matters. Black perspectives matter. We pledge that even more of them will be considered in our ongoing efforts to increase diversity and inclusivity in the investment industry. This includes working with Black-owned investment managers to position them to be institutionally ready to add to our pipeline of diverse-owned managers. We propose the following strategies to be of greater service to our industry in an effort to reflect the entire nation.

· Black-owned businesses matter. Seed and fund Black-owned businesses. In 2018, 80% of venture capital dollars funded white start-ups while 3% went to black founders.

· Black women leaders matter. Support Black women leaders. There are only four black CEOs at Fortune 500 companies and none of them are women. Only two Black women CEOs have ever led an S&P 500 company.

· Black-owned investment managers matter. Direct your money toward Black-owned funds. Out of the $71.4 trillion in assets under management, less than 1% is managed by Black investment managers.

· Black investment advisors matter. Hire Black advisors to manage your portfolio. Advisors are gatekeepers to allocating dollars to Black-owned investment managers.

· Black board members matter. Insist the companies you invest in have Black board members. Board leadership drives jobs, contracts and allocation of dollars to nonprofits. White men hold 91.1% of board chair positions of Fortune 500 companies.

· Black investment organizations matter. Support nonprofits like the National Association of Investment Companies (NAIC), the National Association of Securities Professionals (NASP) and New America Alliance (NAA), who work to increase the representation of diverse-owned asset managers.

As we continually strive toward the ideals of equality and justice, let us not forget the ability of our investments to equalize the playing field.

Sincerely,
Tiffany McGhee
CEO & CIO
Pivotal Advisors