Institutional Limited Partners Association (ILPA)
How is ILPA supporting the field of gender and JEDI investing?
ILPA’s Limited Partner members (LPs) expressed the desire to see managers accelerate implementation of specific best practices to advance diversity, equity and inclusion, including data collection on diversity metrics, cultivating diverse talent at senior leadership levels, and portfolio company engagement.
ILPA observed that General Partners (GPs) were struggling with where to start in goal setting and defining diversity metrics, and integrating DEI more broadly into their investment strategies. In order to address these market gaps, ILPA created the Diversity in Action initiative, built around a framework that defines what good looks like for diversity, equity and inclusion (DEI) in the private markets, with an initial emphasis on LP/GP dynamics.
ILPA launched the initiative to demonstrate and formalise the industry’s collective commitment to advancing DEI by identifying both the breadth of support for DEI among both LPs and GPs (mostly in the private markets in North America, Europe, and Australia), as well as calling out the specific actions being undertaken and providing visibility into progress made over time. The objectives of the initiative are to:
draw attention to the good work that LPs and GPs are doing
provide a platform for assessing collective progress around a set of meaningful actions
motivate more market participants to become more diverse and inclusive
build momentum around the adoption of specific actions that advance DEI
create a vibrant dialogue among committed LP and GP practitioners on the evolving landscape of DEI best practices through quarterly roundtables.
ILPA is committed to open-sourcing the DIA tools and methodologies, not keeping them behind their member paywall. The way they see it, LPs benefit if GPs have access to standards, resources, and tools. Therefore, their DEI Roadmap (2020), DDQ, Diversity Metrics Template, and April and August progress reports are all public and open sourced.
How is the JEDI lens defined?
ILPA defines diversity in terms of gender, race, ethnicity, and LGBTQ / non-binary identifying persons, as reflected in the ILPA Diversity Metrics Template released in November 2021.
While globally consistent information is critical to LPs as allocators with diversified portfolios, ILPA recognises that the understanding of which specific group(s) are under-represented will vary by geography as well as industry. ILPA invites users of the ILPA DDQ and Diversity Metrics Template to share qualitative information about the breadth and nuances of diversity beyond what may be captured in a set of fields.
The Diversity in Action framework was drawn from a broader set of 35 actions identified through the open-source DEI Roadmap and Resources; of these, ILPA’s DEI Advisory Council identified four foundational elements which Diversity in Action signatories are required to implement, plus an optional set of nine based on action, intention, and accountability (of which signatories must implement at least two.)
LP calls to action
The minimum requirements for LPs to join the DIA initiative are to:
Have a publicly communicated DEI statement or strategy and/or a DEI policy communicated to employees and investment partners that addresses recruitment and retention
Track internal hiring and promotion statistics by gender and race/ethnicity
Have organizational goals that result in demonstrable practices to make recruitment and retention more inclusive
Request DEI demographic data, such as the ILPA Metrics Template, for any new commitments
This is not a pledge or a commitment: Signatories must already be implementing these elements, and they must provide information to ILPA in writing about their practices and update ILPA annually.
Key Learnings
ILPA isn’t tracking diversity data, it’s gathering qualitative data around specific actions and patterns of practice. For example: What targets are being set? What new programs and policies are being implemented? What sorts of partnerships are being struck?
DIA signatories continue to think about what it means to have cultural and cognitive diversity, and the defining features of a truly inclusive culture. This means looking at socio-economic and educational background, non-visible forms of diversity as well as the link between identity and employee engagement.
Snapshot
Name: Diversity in Action Initiative
Type: Membership organisation of limited partners
Focus: Engaging, empowering and connecting limited partners to maximise their performance on an individual, institutional and collective basis
Location: United States
“We sought to create a framework that struck a balance between being sufficiently aspirational (and inspirational) while also attainable for a broad diversity of organisations by size, maturity, team size, etc. We wanted something that would work for a majority of the industry, but that had substance and wouldn’t be a tick-the-box exercise”