The New Fund Order

Talk About Black: Diversity in Selection (with Justin Onuekwusi)

October 03, 2021 JB Beckett/ Justin Onuekwusi Season 1 Episode 19
The New Fund Order
Talk About Black: Diversity in Selection (with Justin Onuekwusi)
Show Notes Transcript Chapter Markers

Welcome to the New Fund Order. An Orwellian journey into the Darkside, the Frontier and the Fringe of Finance.

In our ever ending journey to tackle the tough topics in our industry, I talk to Justin Onuekwusi about his ‘I am’ campaign and ‘Talk about Black’.

We discuss why there is a lack of diversity, why there is not enough black representation in finance and asset management… and indeed fund selection. What are the industry biases, what are the structural barriers to progression, are monikers like ‘BAME’ helpful, what can fund selectors do to become allies?

Together with left-field opinion, global market news and latest views, direct from my dystopian bunker. In association with my sponsor Allianz Global Investors (AGI) one of the world's leading active managers.

Please LIKE, SHARE and SUBSCRIBE. Please leave a REVIEW and let me know what you think and what topics you would like for future episodes. Until then... stay safe and.. keep it left-field!!

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Credits: Archive.org. Jessie Jackson, address to the Democratic National Convention. Public Domain 1.0 https://ia803402.us.archive.org/6/ite...
Music: Liturgy Of The Street by Shane Ivers - https://www.silvermansound.com
Pictures and videos: Pixabay.Cos, Getty images, Reuters




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JB Beckett  0:26  
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At a time like this, you are forced to deal with your irreducible essence, forced to grapple with that which is really important to you. Without the truth about life, you would have said, When all is said and done, we must forgive each other and redeem each other and move on.

JB Beckett  1:32  
Allianz Global Investors is one of the world's leading active managers. And in these strange pandemic lockdown times, rest assured that all guests are calling in remotely. 

And welcome to the new fund manager Justin, as a multi asset fund allocator and one of the few black fund managers in the city you have risen to become a leading voice in the ethnic diversity and social mobility within our industry. Nice to have you on board.

Justin Onuekwusi  2:00  
Thank you delighted to be on.

JB Beckett  2:01  
Much of the subject matter we're going to talk today... can be quite politically charged. But obviously we're trying to, I guess, give our listeners some sorts of meaningful help, how it affects their lives, how it affects their working lives, I guess how it affects fund selectors, right, you know, making decisions, you know, are they are they part of the problem? Are they part of the solution? You know, something's just happened without, you know, even thinking about it. And I think maybe what we'll try to do today is try and bring that to the fore for them. So let me let me throw you into the first one, as I said, as that leading voice, in the 'talk about black' and of course, the 'I Am' campaigns, how have those conversations been developing? And are you optimistic or disheartened with the progress so far?

Justin Onuekwusi  2:48  
Yeah, thanks, JB. So if I look back at last year, in particular, I wouldn't, I wouldn't, I'd never say that I was the leading voice, I'd say I'm a voice.

And we have, we did have, you know, significant traction last year, though, in terms of being listened to and being heard. But I just want to just really stress that 2020 and a little bit into 2021, well actually more recently, in 2021. It's just been extremely difficult to keep on verbalising, keep on really banging the drum and talking about diversity overall, particularly in relation to ethnicity. Because it hits so hard, and something that you know, clearly has affected me... since since since I was born, it's actually just extremely difficult to do so. So I you know, I praise and welcome any kind of champions and allies that continue to beat the drum here, and you're one of them so thank you for that. But as I say, there's a lot of vulnerability in there and throughout 2020 was just actually a really difficult year in terms of many people in terms of banging that drum and verbalising their personal experience. But when I look at businesses, I think like the, we've moved on, in a positive way, in that the conversations have been successful. You know, I as well as many other people have been in two major asset managers spoken to boards, the reaction has always been positive. But I think now, the conversation needs to end and the actions really need to start and I think that's what's been lacking. And if I, if I look over the last 12-18 months, and I think about the challenges, I hope they can be summarised in a few points. 

First off, Firstly, I think what something like the diversity project does, it brings people it brings businesses together. But I think businesses overall are still trying to implement this in isolation. And when it comes to ethnic diversity, ethnic diversity is such a societal issue, right? That I think businesses they can't individually try and implement this, they have to have the clubs together the keys and the hose pipe that are spoken about so many times, that stops talent from flowing through. Actually, one business cannot own cake, the cake themselves that we need to work together. The second point, I think, asset owners, fund researchers, the regulator, the people that can really influence and move the dial haven't really prioritised this, until more recently, with the latest research doc, discussion document from the FCA, the Bank of England, the PRA, and then the asset owner charter that we see more recently from the on the institutional side where asset owners and consultants have come together to put together a charter around diversity, which includes ethnicity. And then the final point I think, this is this is so fundamental to all of the discussions on ethnic diversity is that people so far have fought the solution is lecture sought out the graduate or the the junior wrong, because it's so easy to do that. And if we do that, then all of a sudden, everything else will. Everything else will miraculously change, and, and so on and so forth. 

But actually, all the work that we're doing now says actually entry level, the diversity initiatives, we're at saturation point, and that doesn't mean we need to stop. right but but but it, there's lots and lots of initiatives, 100 black interns can get the skills workshop, or preach recruitment focus at the at the junior level. But actually, it's when it's when you drop this diverse talent, not only ethnic talent, when you drop them into businesses, with finding that the cultures are not inclusive enough, in order to progress people, throughout businesses, so what you have is talented people dropping out of the workforce at mid level. So until businesses really focus on their core culture and making them more inclusive than the never really going to, you're never really going to see senior black ethnic minorities … rise through rise will rise to these businesses.

JB Beckett  7:57  
…I want to get into this idea against of institutionalised structures, right and how that has an effect on it. But before before we get to that this idea that you see that we have graduates and interns and then they come into the organisation, there's a lack of cultural fit, they basically run out of roads, they can't and then as you say, progress up is that, you know, we talk about glass ceilings, right? We always talk about glass ceilings, particular, you know, on the gender side, I'm talking about bath, but is there a committee ceiling as some of that cultural misalignment happening at committees is that when they're coming up to present a paper they're, they're facing, frankly, a sea of white? And that is a bad reaction there? Or is it closer to home? Is media lane management? Where do you think it's breaking down?

Justin Onuekwusi  8:45  
I think it's breaking down at lots and lots of different points. And I'll just give you a few examples. So I run after spotting this challenge. I run mentoring circles, the call the N circle mentoring circles and really they are for people of zero to 10 years experience to help them navigate the corporate environment. So we've spoken to them about the mentees about things like negotiating, negotiating pay, how to deal with media reviews, how to deal with feedback, how to think about the personal brand, how to think about imposter syndrome, how to how to articulate themselves in in presentations, but I think fundamentally what it comes down to is when you join any workforce, you want to feel like he belonged. But the more different you are from that workforce, almost the greater the adaption or the the fitting in that you need to do and therefore the further Wait for your authentic self that you've that you've that that you become. And that is it just creates a huge challenge to that individual. Huge mental stress that individual. 

So what the good businesses are doing is that they're recognising this. And they're saying, well, actually our policies, we, our policies, our environment, our line managers needs to be more inclusive. So actually, it's not about the individual adapting, it's about us as a business, adapting to the individuals that we have. A great example is no senior person in the industry, who, you know, is a senior black leader as a business, and is trying to progress to the upper echelons. And it's been recommended from his business to get to see a coach. But clearly, given that he's got this burden of being a leader in trying to deliver racial equity, across the industry, in the corporate sphere, the kind of coach that that person needs, is somebody with experience in or at least understands ethnicity and understands, understands the situation that he's in. But when, when you're recommended a suite of coaches and they're all white males, and none of them, none of them, actually some females, as well as some women as well, but but all kind of all non ethnic minorities. And none of them say they are, they've got experience in dealing with, you know, racial, racial equity and thinking about, you know, as an ethnic minority, how you can progress, that's a huge barrier, it's a huge part, you need to try and learn pick up that experience from from elsewhere. So that is one example even at senior levels. How, how, you know, having that challenge of nobody to speak to, to kind of help you navigate your own career is a huge challenge. And actually, it's one big advantage of being pa talk about black. 

One big advantage of being part of the diversity project is that all of a sudden, I have people have very similar experience to me, that I can lean on when having those, you know, difficult career moments. You know, whether, you know, when we're hiring people, when we're thinking about, you know, culture, the overall inclusive culture of the business I'm in, I can lean on these senior black peers and ethnic minority peers, and get their opinion that's vital.

JB Beckett  12:50  
...and we hear about institutional racism, whether it's in politics or in the police force. And I think the city too has been forced to face it's on colonial origins, has faced many protests in the past. You recall back those anti capitalist riots where everyone locked themselves themselves into their offices, you know, and they... tore through Bishopsgate, but also the extinction religion (nee Rebellion). Is the city now facing up to its role. Is it listening? Can it reconcile its origins, perhaps with a greater sense of social purpose?

Unknown Speaker  13:27  
As a really, really good question. I think, let's tackle institutional racism first, the recent report into racial and ethnic disparities Dr. Tony Sewell. I think, you know, that's debated institutional racism. A lot. And it's caused a lot of division with a lot of people. I can only talk about my experience, and my experience as an ethnic minority in the UK doesn't marry with the experience that was portrayed in that report. And doesn't my with my family's experience, or my friends experience, there are structural barriers that I believe are stops a number of people that I know are very close to progressing as much as as much as they as they could have done. I think what's the most upsetting thing about that report? That was the was the tone it was written? I think I think that's caused a lot of the debate. And actually, the other thing is it stops. I think the debating is really meant that the actions that we're starting to be taken in workplaces in society, of the removal of these structural barriers, some of them have been thrown up in the air and I think that to me, is is really disappointing. But when you start to To the city. You know, the city is clearly embracing ESG. The if I look at the fund managers, asset managers, I don't know any asset manager that doesn't have an ESG range or ESG running through their DNA, and so on and so forth.

Justin Onuekwusi  15:20  
But we, 

JB Beckett  15:23  
...we say that with a pinch of salt, right,

Justin Onuekwusi  15:25  
yeah, Yes, exactly. But but but, you know, the focus has been on the E, right. So it's been on the kind of a so far, the majority of the focus has been on climate change. Right, I do think that the focus is moving on to the S. And I think when the focus does start to move on to the S, diversity, and inclusion is clearly a key part of that. And I think a lot of these asset managers are going to have to start to look inwards. But ultimately, as sole custodians of client clients capital, there's a responsibility of asset managers to, you know, have a social conscience, when it comes to the city, and colonialism. I think it's very difficult to highlight and points at the city, I think, you know, if you look at our country, our nation, the UK, it's very difficult not to argue that the economic position of the UK over the last hundreds of years hasn't been built on, you know, slavery, colonialism, colonialism. Windrush generation immigration, and all of those clearly have led to where we are today in terms of ethnic diversity. It's very hard to detangle the city from the UK in a way. But I'd say as a fun selector. I think that we can definitely do something what what the asset owners have done with their charter, I think we can do something like that in the retail space, I think, you know, one of the things that I'm working on is working with different funds selectors to try and put together a charter to really say, this is what we stand for when we research managers. And I think that will make a huge difference on the retail side, as the asset owners and the and the investment consultants at to make on the institutional side.

JB Beckett  17:31  
Yeah, I mean, obviously, over the last couple of years, we've seen some advancements on the gender agenda along those I'm thinking here, Luba's team over at Towers as they brought in a lot for for that as well. But it feels like we're still at least two to three steps behind that in terms of ethnicity. And I've, I think, through my career, through the mists of time here, Justin, and I think I think back, I reckon it's probably less than 1%. of, you know, seeing black fund managers actually even come across black fund managers. 

You know, we'd be at conferences and workshops, even even on site visits, going into specific fund managers and saying, 'let me meet your fund managers', that that creates a bit of a circular loop, you know, by not exposing fund selectors, it becomes quite difficult. How, how do we? How would we fix that balance? How do we get more people from ethnic backgrounds wanting to join this industry? Right from the get go, you're coming into our industry, don't go to don't go to tech, don't go to retail, don't go to automotive, but come to, to finance? How do we make that an attractive place to come to?

Justin Onuekwusi  18:57  
So I don't think that that if we know if we're simply out there, and we're talking to students, we're talking to kids. I actually think that that's, you know, I think there there are lots of black and ethnic minority talent that would love to join the asset management industry and I get bombarded on almost a daily basis of people who, you know, want to be investors. I think that the I also actually think there's enough people within the asset management industry and and partners to create enough talent that could sit on investment teams, but in 2017, just to kind of stress or how bad he says it's 27 And seen before any light was shown on this the first light that was shown in financial news. And then the latest report by new financial kind of came with a very similar number. And so the black fund managers in institutional fund management houses, you're talking what 12 black fund managers in 2017! You know that that was that that's all they could find. So, it's frightening, we cannot argue we cannot argue that that is down to the asset management industry not being attractive enough, that there's fundamentally a lot more issues that drive in that. And you know, it's really interesting. When when we, we sat down with those black fund managers, not not very, not very difficult to do when there's only 12.

I mean, you speak to the people around the table. And I think out of the 12, three of them, were UK, UK born. So, you know, fundamentally there is a serious issue. And then, so a lot of them were from managers before they came into the UK. 

So yeah, I really struggle that this is all about attraction. I think we are fundamentally we're not promoting the best talent, or we're not promoting talent fairly within our organisations. And also, I think a lot of people are are applying and just as you mentioned, in your example, and just getting turned away, I know so many people are black investment professionals, that just packs it in and said this the after 12, no, seven to 12 years, that's enough for them, because they're not going anywhere. So they got to find the stuff on different career.

JB Beckett  21:52  
Yeah, and it's absolutely shocking. And I think you know what, I'm kind of thinking about the ex Credit Suisse CEO, cio, is it Tidjane Thiam, 

Justin Onuekwusi  21:59  
yeah Tidjane, 

JB Beckett  22:00  
...and the way and the way he was treated showed, that anything that goes wrong, is somehow linked back to his race, which is not something you'll ever hear any other fund manager. And I think I think for fund selectors just not having exposure. So I think we're unwittingly part of the problem. But I'm not sure what the call to action is to fund selectors other than saying change your due diligence to ask the questions, right?

Justin Onuekwusi  22:26  
Yeah, I think I think that's it. I think, I think as a fund selector, what are fund selectors, what we can do is just shine the light and just say, (fund) manager, we want to know what the breakdown is, of your workforce of your investment teams, forget the workforce, the investment teams, of women and minorities, and ask them to respond that ask them to respond, because I tell you what, the more and more you ask managers, and the more and more that they're publishing numbers, which they're embarrassed of, you know, that will, you'll start seeing change very quickly.

JB Beckett  23:07  
Yeah, just to finish I've got my My Little rapid fire round, which I'll have to I'll have to ask you as well, I'm afraid, Justin. But before we, before we get to that, I guess I know another area more broad to the just the I guess the ethic question is one of broader social mobility? What can we do as an industry? And within that fund selectors as part of the industry? What can we do collectively to improve social mobility? Be it whether it's educational background, socio economic background? What can we do to actually create a more representative and I guess, a fairer industry a fairer system that allows better social mobility?

Justin Onuekwusi  23:51  
Yeah, so I think from from a social mobility perspective, you know, clearly this is one aspect of diversity and inclusion, which probably hasn't had as much of the limelight as, as, as others. And that's why I'm kind of really proud to be part of the City of London, social mobility, taskforce advisory Task Force, because I do think it is, it is really important. And you seen more recently the reports about, you know, working class white boys severely under underachieving from an educational perspective. I think, you know, this is something that we that we do need to look at, we do need to have, have have a focus. I think, I think, overall, what the asset management industry or a number of things the asset manager, marginally could do. But one thing I think we need to do is really focus on where they find talent, and where they engage with that talent. And the Good way to think about it and I'll take my my football team Manchester United Why not? Let's get them in somehow. 

And I think about when they when they start when they recruit youth players the players don't actually break into the first team until what 1718 and sometimes even later but they're out casting the net kind of like you know 7,8,9 you know that's when they get the rushes that's when they get the mason Greenwood's. And they nurture them and nurture them over the years because they know that that's the way you get the best the best talent in the world. And I think that asset managers probably also in fact if all of our big companies if they claim to be the creme de la creme, you know, one of the strongest companies in the world globally then actually, they have to cast it out a lot earlier they need to be thinking about identifying talent early and not just relied on and coming through the system and being this perfect model colleague that's ready to slot into our organization's immediately so I think it's going beyond University, it's going to school is teaching them about Asset Management teaches people how to manage their money teaching the softer skills, because our industry has the resource and to do that so I think it's gone beyond the kind of waiting for Russell Group universities to students that come with a CVs and actually cost a little bit wider.

JB Beckett  26:53  
Yeah, I think you're absolutely right i think it's gonna start pretty early on in the education system and then it just felt like the industry needs a proper look at itself in a proper shakeout when it comes to internships and and rather seen internships as privilege for for privileged candidates and I know like I know some great interns come through that system and it's not their fault it's the infrastructure it is the institution around that but that feels like that's an early point that could be addressed right so anyway okay let's let's lighten the mood I with my non racially charged 10 rapid fire questions. If you are ready Justin we shall begin?

Justin Onuekwusi  27:38  
Yeah, let's go let's go let's do this

JB Beckett  27:40  
good stuff. No, no penalties make no penalties.

Justin Onuekwusi  27:45  
Thank goodness 

JB Beckett  27:46  
Question number one, bull or bear?

Justin Onuekwusi  27:50  
Bull 

JB Beckett  27:51  
Question two... Bogle or Buffett?

Justin Onuekwusi  27:55  
Oh, it's got to be Buffet.

JB Beckett  27:58  
Question three profit our planet?

Justin Onuekwusi  28:03  
Planet... But but but but it now well, 

JB Beckett  28:07  
there's the 'but' 

Justin Onuekwusi  28:08  
yeah, there's so it's profitable with a social conscience.

JB Beckett  28:13  
Okay. Question four, divest or engage?

Justin Onuekwusi  28:19  
Engage

JB Beckett  28:21  
Question five, lower cost or better value?

Justin Onuekwusi  28:26  
It has to better value, right? I mean, yeah, has to be.

JB Beckett  28:29  
Question six. One of my favourites supertankers or boutiques?

Justin Onuekwusi  28:34  
Oh, well, it depends on it depends what you're looking for. Yeah, so I always value when my analysts find these kind of jewels, these jewels that nobody else has found. So I always I always praise them... when they find managers at boutiques, so I'd probably I'd probably go for boutiques. But yeah, but I do recognise that supertankers clearly have their role. And the way we go into the industry, we're going to see a lot more supertankers. 

JB Beckett  29:10  
Well, on a similar vein, question seven star managers or team players?

Justin Onuekwusi  29:15  
Yeah, I think it has to be has to be team players. Although, yeah, I think I think it's really important that you that you do still invest in talent and clearly that you are going to have people that are stronger than others. But you know, team, from what, from my perspective, the only way to really invest for a multi asset perspective idea is in a team process.

JB Beckett  29:42  
Sure. Question eight, public or private?

Justin Onuekwusi  29:48  
Oh, in what sense?

JB Beckett  29:51  
Most people have interpreted that to be more about markets than perhaps personal life.

Justin Onuekwusi  30:01  
Yeah, I'd say I'd say public

JB Beckett  30:06  
 Question nine, high growth or stable income?

Justin Onuekwusi  30:16  
I think stable income, which is going to be bizarre given my age, but I think that people underestimate the power of compounding.

JB Beckett  30:25  
I agree and of course increasingly elusive at this stage, particularly given where inflation is heading right now. And question 10, definitely one of my favourites, socialism or free markets? And you can only pick one, 

Justin Onuekwusi  30:42  
I can only pick one as this, this is this, this is difficult. So, I think if I was asked for a allocation of capital perspective, I'd be free markets. But then from a personal perspective, I think you have lots of market failures when you follow a purely private model. And so if you push me, I'd say private markets, but that wouldn't be the full answer.

JB Beckett  31:16  
So just to clarify, if you had to pick one, it would be free markets? 

Justin Onuekwusi  31:21  
free Yeah, free markets. 

JB Beckett  31:22  
Okay. Okay. Okay, well, we'll just we'll just leave that there. And that just leaves the bonus round, if you can choose a number between 11 and 40

Justin Onuekwusi  31:35  
Let's go with my number 20

JB Beckett  31:38  
oh, number 20 is still available. It is 1984 or 2001 AD, which is a bit of our popular culture. It's basically Orwell or Judge Dread?

Justin Onuekwusi  31:50  
Oh, right. Okay. Okay. Well, I see you mean, I'd say 2001.

JB Beckett  31:58  
Yeah, you could have, I suppose technically, you could have gone Kubrick with 2001 as well. Yeah, yeah. 2001 There we go. Good stuff.

Justin Onuekwusi  32:06  
Well, yeah, I remember 2001, I was 2 years old in 1984. So...

JB Beckett  32:12  
thanks very much mate. And that marks the end of our interview you have survived the new fund order Justin, just want to say thanks very much for coming on the show.

Justin Onuekwusi  32:23  
Thank you. Thanks for having me.

JB Beckett  32:25  
Great stuff. Justin. Thank you. 

Please don't forget to like and share and subscribe you know, click the subscribe button. A new podcast every two weeks with a new guest. Stay tuned. 

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Computer  33:03  
new fund order. 

JB Beckett  33:04  
Please subscribe, share, like and comment. Let me know what you think and what you'd like covered in future episodes. Until then, stay safe and keep it left field!

Clip: Jesse Jackson at DNC  33:21  
with our help the competition should make us better, not bitter. We must use... must use the insight, wisdom and experience of the late Hubert Humphrey as a balm for the wounds in our party. This nation and the world. We must forgive each other redeem each other regroup and move on. Our flag is red, white and blue. But our nation is rainbow, red, yellow, brown, black and white. We all precious in God's sight.

Transcribed by https://otter.ai

Talking About Black with Justin Onuekwusi
Gradualism vs Reasons for Optimism?
Role Models and Mentor Circles
Colonialism in the City?
Why so few Black Fund Managers?
Social Mobility Task Force
Attracting and Nurturing Talent
Rapid Fire Round