The financial world is embracing diversity, equity, and inclusion. More than 100 finance industry organizations worldwide representing $11.2 trillion in assets under management have signed the voluntary DEI Code, an initiative the CFA Institute launched last year.

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Organizations who have signed on represent about 10% of the industry’s global total AUM. Signatories include the California Public Employees’ Retirement System, Cambridge Associates, Nuveen, LGIM America, Alberta Investment Management, the California State Teachers’ Retirement System, the Massachusetts Pension Reserves Investment Trust, Northern Trust Asset Management and Wellington Management.

The code revolves around signatories filing to the CFA Institute confidential annual reports on upholding six main principles: expanding talent pipelines; hiring and onboarding; promoting and retaining personnel; leadership accountability; fostering DEI throughout the industry; and constant measuring and reporting of progress.

The CFA Institute has agreed to aggregate data from the reporting and to provide new industry-level DEI action data, beginning in the second half of this year.

Margaret Franklin, the CFA Institute’s CEO and president, described the organization’s goals in a statement: “We launched the DEI Code because we recognize that diverse perspectives lead to better outcomes—better outcomes for investors and better outcomes for society—and create an inclusive investment industry that will better serve and be more reflective of society as a whole.”

Research, including a PwC Global survey that found 85% of financial services CEOs said DEI helps improve corporate performance, backs up the sentiment that diversity leads to better outcomes. Another bolstering study, from McKinsey & Co., indicated that top-quartile companies for racial and ethnic inclusion outperformed those in the fourth quartile by 36% in profitability.

The fact that major organizations in the financial world are intent in furthering DEI—and measuring their progress—is a plus sign for the movement.

Deals & People February 3, 2023

PE Firm LMP Invests in Retirement Services Provider Definiti

LMP’s majority stake in the retirement administrator and recordkeeper will fund strategies including “aggressive” strategic acquisition.

Reported by

Alex Ortolani

Private equity is not done with the retirement industry in 2023.

On Thursday, private equity firm Lovell Minnick Partners LLC announced an agreement to acquire a majority stake in Definiti LLC, a 401(k) plan design administration consultancy and recordkeeper. The investment will be put toward client services and organic growth, as well as strategic acquisitions, according to Philadelphia-based LMP. The firms did not disclose the size of the investment.

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The deal signals continued interest from private-equity firms in the retirement advisory and recordkeeping space, even as overall PE activity has been falling over the past two quarters, according to PwC Consulting. In October 2022, recordkeeper JULY received an investment of an undisclosed amount from PE firm Platform Partners, and in April 2022, private equity firm Stone Point Capital, along with GIC, Singapore’s private wealth fund, announced an acquisition of retirement services provider Ascensus.

Houston-based Definiti serves more than 8,000 employers and 10,000 retirement plans in the U.S. as a third-party administrator for retirement plan administration, recordkeeping and compliance services, as well as actuarial consulting and pension outsourcing.

“Our investment in Definiti is a testament to its strong reputation and ability to differentiate itself as a market leader,” Steve Pierson, managing partner at LMP, said in a release. “We look forward to partnering with Tom and the management team to extend Definiti’s reach, enhance its service capabilities, and aggressively pursue strategic acquisitions to complement its organic growth trajectory.”

The transaction is expected to close in the first quarter of 2023, subject to customary regulatory reviews and approvals, according to the firms. Waller Helms Advisors served as financial adviser to LMP, and Raymond James served as financial adviser to Definiti.

Definiti was formerly called Group RHI, which acquired firms in the workplace and billing administration spaces to bring them under the banner of Definiti, according to the company.