Why Diverse Companies Perform Better

International Women's Day: Goldman Sachs's Laura Destribats talks being a female fund manager and why equality is so important for the GS Global Millennials Equity fund

Holly Black 11 March, 2021 | 10:25AM
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Holly Black: Welcome to Morningstar. I'm Holly Black. With me is Laura Destribats. She is Manager of the Goldman Sachs Global Millennials Equity Fund. Hello.

Laura Destribats: Hi. How are you?

Black: So, we're sitting here just after International Women's Day. So, I have to ask, what's it like to be a female fund manager in what is a very male dominated industry?

Destribats: So, look, I think first of all, male or female getting to be an investor and a fund manager is an incredible privilege. It's really about three things. One is intellectual curiosity; two, risk taking; and three, teamwork. And so, across all three of those if you can work in an environment where you're exposed to different viewpoints where healthy debate is created, that dramatically increases your chances of being able to generate performance over the long run. And so, actually, throughout my career I've been frankly incredibly fortunate to be able to work in that kind of an environment. Diversity is core to our culture at Goldman. And it's embraced by both women and men. But you're right that if you look across the industry, about 14% of funds are managed by women. And so, there's still a very long way to go, frankly. We're lucky that at Goldman Sachs Asset Management 50% of our funds are actually managed by women.

Black: So, how do you think – is diversity something you consider in your investment approach? Are you looking for that in the companies that you hold in the portfolio?

Destribats: Yeah, absolutely it is. And so, look, I think, first, if we take a step back and we think about our team, the team is built to be diverse and that's not just an issue of accountability, but it's more about the fact that we passionately believe that diverse and inclusive teams will perform better. And so, over time we've built a culture that fosters that. And if you think about women in this industry, what they really want is to be able to look up and see other women that are in seats of authority, influence and risk taking. Now, as you think about how that impacts our investment approach, of course, as we believe diverse investment teams perform better, we also believe that diverse companies perform better too. My background is actually in the consumer space. And as you think about it through that lens, $32 trillion of consumer spend is done by women, 80% to 90% of household consumer decisions are made by women and so, how could you possibly hope to be successful in the consumer space if you don't have those perspectives reflected internally within your own corporation?

And so, the way that we incorporate this then within Goldman is two-folds. So, first, we incorporate diversity considerations when we evaluate companies and then we make this a priority as we think about our stewardship efforts, so the way that we vote our proxies to ensure that we're pushing businesses to have that diversity. And then, the second is that to some extent you're also able to find companies whose core value proposition actually helps to support better diversity in the workplace. And so, think about companies that are leading the charge in childcare, right, so helping to enable women to be in the workforce.

Black: And your fund is all about millennials anyway. So, I'm presuming that influences your investment choices as well. How important is diversity to millennials?

Destribats: Yeah. So, if you think back – so the World Economic Forum put out this report in 2018 that stated that if we followed the current trajectory it would take 108 years to close the gender pay gap and I think millennials is the generation that will look at that and say, not good enough, right? And so, they grew up during the #MeToo movements; they are deeply unafraid of making their views heard; they are empowered by social media and they will absolutely direct their spending decisions to make sure that they are aligned with their values. And so, as we think about that from an investment perspective, we need to make sure that the businesses in which we're investing that their values are aligned with that of millennials. And I know we're talking about gender diversity today, but frankly, that goes – it's much more broader than that. It's about any type of social issue and also, the companies' perspectives on the environments and making sure that they're doing what they need to do to get them in the right direction as well. So, it's definitely very important in the way that we think about investing.

Black: Laura, thank you so much for your time. For Morningstar, I'm Holly Black.

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Holly Black  is Senior Editor, Morningstar.co.uk