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Organization Name

Calvert Investments, Inc.

Case Story Title

Calvert Emerging Manager Program

Case Story Date

2002/10/21

Issues Addressed

  • Principle 1 - Businesses should support and respect the protection of internationally proclaimed human rights
  • Principle 6 - Eliminate discrimination in respect of employment and occupation

Case Story Category

Partnership Project

Countries of Impact

United States of America

Case Description

Calvert, best known for the largest family of socially responsible mutual funds in the US, has assets under management of $8.5 billion. For Calvert's equity portfolios, we seek money management firms to work with our Social Research Department as portfolio managers. The fundamental question we asked ourselves was how to incorporate principles of the GC into our core business operations.

When seeking money management firms, Calvert has typically looked at assets under management, quality of the firm, investment style, and the length and consistency of the investment track record. As we began our manager search for our flagship social fund ? the Calvert Social Investment Fund (CSIF) - we initiated a careful review of whether our parameters resulted in an unintentional exclusion of minority- and/or women-owned money managers. While one of our sub-advisors is a minority-owned firm, we were disappointed to learn that we did not have a process to ensure that these firms are not excluded from the mainstream manager selection process.

According to a Pensions & Investments review (May 2002), out of a total of 762 money managers in the US, approximately 75 are minority and women-owned (the same as in 1991). However, Black Enterprise (June 2002) highlighted phenomenal growth and emerging leadership in an industry with historically few examples of successful minorities. Despite this promising outlook, minority- and/or women-owned money management firms continue to be under-represented. Calvert felt a responsibility to address these barriers to diversity and provide opportunity. We set out to develop an innovative process to encourage diversity by providing these firms with recognition in the investment marketplace, particularly the opportunity to compete with larger investment management institutions.In a continuation of Calvert's historic commitment to promoting minority and/or women owned firms, we developed the Calvert Emerging Manager Program. The goal of this program is to make allocations to promising emerging managers thereby introducing them to a wider investment marketplace to which they would otherwise not have access. Importantly, the selection process for this program is no different from the rigorous selection criteria used for any other manager for Calvert Funds. Investment firms must be of high quality, posses a rigorous and consistent investment process, exhibit good consistent performance and risk characteristics, and have the ability to work with Calvert's social criteria. Calvert just had to look beyond the ?standard? criteria to discover high quality investment management firms owned by minorities and/or women.

Based on the Program's criteria, we are pleased to announce that Calvert has inaugurated the program with an allocation to a Maryland-based African-American firm. We expect to continue to search for minority- and/or women-owned firms, and anticipate that the outcome will lead to increased partnerships with these investment firms. We understand that by focusing on diversity, human rights are promoted. We believe that the Calvert Program should be developed by other money managers.

Our goal is to continue to support the GC principles through our work with Calvert's Emerging Manager Program, as well as continuing to focus on Human Rights as social criteria for judging the suitability of financial assets for investment by Calvert Funds. Calvert is planning to convene an employee committee to determine future projects.

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