DEI in asset management: Goals that industry should set itself for 2025

South Africa’s asset management industry should be acknowledged for the progress it has made in the pursuit of diversity, equity, and inclusion (DEI).

A framework developed by financial services company 27four shows the strides that have been made but equally, how much must still be done.

“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,” explains 27four CEO Fatima Vawda.

“Our 27four DEI Index framework offers a comprehensive approach to measuring DEI in South Africa’s asset management industry. It assesses asset managers across five key dimensions – ownership, representation, equity, impact, and governance -with the aim of driving transformation.

“It not only provides a standardised framework for asset managers to evaluate their DEI performance but also serves as a tool for investors to screen asset managers,” she says.

The index was released at the end of October and is built on inputs from 93 asset managers.

Vawda says it shows progress but also that important gaps remain, and industry should pay attention to closing these gaps in the new year.

• 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.
• 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 industry has made progress in black ownership, with 74% of firms having over 51% black ownership. This indicates meaningful strides toward economic transformation. However, only 18% of firms have over 51% women ownership, revealing a substantial gender gap that reflects ongoing challenges in achieving gender equity in ownership,” adds Vawda.

While black individuals are represented in senior leadership roles (66% of CEOs are black, and 63% of chairpersons are black), women are significantly underrepresented. Only 18% of CEOs and 16% of CIOs are women.

Women tend to occupy more entry-level positions, such as analysts, but face substantial barriers to progressing into senior decision-making roles like portfolio managers, where 76% of firms report less than 30% women representation.

Vawda points to encouraging progress in pay parity, with 94% of firms reporting gender pay equality, which compares favourably to global trends. However, gaps in promotions and retention remain. While 97% of firms promoted black employees at similar rates as white employees, only 87% did so for women compared to men.

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.”

“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. We believe better businesses build a better country. And ultimately, it’s all about the people we serve,” she says.

While gaps persist in DEI governance and workforce representation, particularly for women and black professionals in senior roles, there is clear progress and a growing commitment to change. As private markets continue to grow and regulatory changes reshape investment strategies, the industry has a unique opportunity to align its goals of financial performance with genuine transformation and inclusivity.

“The positive trajectory of DEI practices is encouraging, and with sustained effort, the sector can realise its full potential as a truly inclusive space for all in 2025,” says Vawda.

Download the 27four DEI Index at www.27four.com