To identify any potential racial bias beyond a potential pipeline problem, the researchers asked 180 asset allocators to evaluate four venture capital funds that were led by either black or white men. As such, if asset allocators set incorrect or biased incentives, the entire capitalist system will reflect and reinforce these biases.” “In today’s market, investments flow through professional money managers before taking root in companies and projects. “Given the power and influence of asset allocators – professional investors – it is critical to understand how they deploy capital and make investment decisions,” Monk said. ![]() Professional investors – people who manage money for governments, nonprofits and companies – do not appear to be hiring or investing in professional fund managers with diverse backgrounds, the researchers said, noting previous research that found that fewer than 1.3 percent of the $69.1 trillion in global assets under the four major asset classes – mutual funds, hedge funds, real estate and private equity – are managed by women and people of color. ![]() “African Americans who are most qualified, those with the best track record, are getting blocked the most.”Ĭo-authors on the paper include Hazel Rose Markus, the Davis-Brack Professor in the Behavioral Sciences Sarah Lyons-Padilla, a research scientist at SPARQ, a program in the Psychology Department at the School of Humanities and Sciences co-directed by Eberhardt and Markus and Ashby Monk, executive director of the Stanford Global Projects Center. “It’s not simply a pipeline problem,” Eberhardt said. Doyle Centennial Professor in the School of Humanities and Sciences. 12 in Proceedings of the National Academy of Sciences, suggest that funds led by people of color might paradoxically encounter more obstacles after they have proved themselves to be strong performers, said Eberhardt, who is the Morris M. Eberhardt, in collaboration with the private investment firm Illumen Capital, researchers found that when venture capital funds are managed by a person of color with strong credentials, professional investors judge them more harshly than their white counterparts with identical credentials. In a new study led by Stanford psychologist Jennifer L. Representatives of Fearless Fund partners Parsons and Arian Simone told reporters Thursday during a press conference in Manhattan that the fund was established to address the wide gap in venture capital funding for businesses led by women of color "who confront barrier after barrier to obtain support and investments for their businesses.Psychology Professor Jennifer Eberhardt is lead author of a new study on how race influences professional investors’ judgments. Yet they lack access to capital, access to resources, access to networks," she continued. They're starting businesses at a much higher rate than any other demographic. These women are the most founded, yet the least funded. "When we set out to start we had one clear vision in mind, and that was to change the game for women of color," said Ayana Parsons, the co-partner of Fearless Fund, which was founded in 2019. ![]() Fearless Fund, a venture capitalist firm that invests in female entrepreneurs of color, is now the target of a lawsuit launched by a group founded by the man who led the fight to take down affirmative action in higher education.
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