New data from the Association of Asian American Investment Managers reveals AAPI career attrition at senior levels
New York, NY, May 9, 2023 — A new study released by the Association of Asian American Investment Managers (AAAIM) analyzes AAPI career attrition and female representation in asset management.
Like other diverse communities, Asian Americans and Pacific Islanders (AAPI) face structural barriers in career advancement, resulting in exclusion when moving up into leadership positions at asset management firms. Simultaneously, AAPIs deal with the ‘model minority myth’ and unconscious bias which leads the industry to group AAPIs with Caucasians rather than with other minority communities.
AAPIs face barriers to progression in the upper echelons of asset management, where the non-diverse population prevails. Key findings included:
- There is a 50% attrition rate from entry level to senior level positions among AAPIs
- Mutual funds firms show the highest level of overall AAPI attrition between entry-level and senior-level positions. While nearly a fifth of junior positions are held by AAPIs, less than 8% of senior executives are AAPIs—an attrition rate of over 55%.
- Only about 12% of Real Estate professionals are AAPI and a mere 7.6% have obtained senior-level positions.
- Private equity tends to have the highest overall AAPI representation across seniority levels, however its attrition rate is nearly 50% between junior levels (where AAPIs comprise nearly a quarter of the worker population) to the most senior.
The study also looked specifically at asset management career attrition for AAPI women, finding that:
- Spotlighting AAPI women, the data shows evidence of intersectional challenges. AAPI women constitute 14.2% of all senior-level women; compare that to the 9.9% of AAPIs as a whole who comprise senior-level positions.
- About 20% fewer women compared to men (independent of ethnicity) enter the investment management industry. They then face a ~50% attrition rate that accounts only for gender. Add that to the ~50% attrition rates experienced by AAPIs writ large, and it becomes clear that female AAPI representation as a proportion of all professionals— much less senior-level executives—remains staggeringly low.
- Mutual fund firms show the lowest levels of female AAPI employees as well as a high degree of attrition. Coming from the second-highest percentage of entry level positions, the number of AAPI women falls by over 52% on the path to senior executive. Fewer than 10% of women are AAPIs at the highest level of seniority.
As one female respondent noted, “The most impactful career advancement age feels like it was around my 30s and 40s, and that’s when the discriminatory actions seemed more evident. First to get cut, last to get promoted, assigned more responsibilities for less pay.”
Brenda Chia, AAAIM’s board Co-Chair, notes that by contributing to an environment that hinders AAPI and female AAPI advancement, firms “are losing highly qualified, smart and driven leaders who bring the perspectives and experience required to serve an increasingly diverse world.” On the other hand, by working towards greater AAPI retention and leadership, firms have the potential to harness immense growth.
The study encourages asset management firms to take a close look at corporate, cultural and individual relational dynamics. Structural changes can include sponsorship, mentorship, and supportive programs for diverse workers – including AAPI workers, and AAPI women specifically. Asset management firms can reevaluate the mechanics of how leaders are selected whether the standard criteria precludes newer talent and ensure that AAPI candidates are on the list. Additional measures could include blind resumes and culturally-informed leadership training.
The study was conducted by Bella Private Markets looking at the top 100 firms in each asset class – private equity, real estate, hedge funds and public equity – and hand-collected the employee information of over 20,000 individuals.
The Association of Asian American Investment Managers is a national non-profit organization dedicated to increasing diversity and inclusion in the investment management industry and serving as a powerful voice for the Asian American and Pacific Islander (AAPI) community. Our goal is to elevate underrepresented groups through education, networking, and empowerment.
Binna Kim / Vested on behalf of AAAIM