Diversity is Good for Business
“Using diverse investment firms is not only about creating growth and opportunity in our communities, but it’s integral to increasing our investment returns.”
-Illinois Treasurer Michael Frerichs
The Illinois Treasurer’s Office believes that our government should mirror the diversity in our state. And beyond that, diversity is good for business. Research demonstrates that diverse-owned companies are often well-situated to ascertain capital inefficiencies in the market, and as such, many are primed to outperform their peers. That’s why we’re focused on providing more opportunities to qualified Minority, Women, Veteran, and Disabled-owned (MWVD) financial firms and to firms with a record of equity, diversity, and inclusion within their firms.
- MWVD Broker/Dealers – Since 2015, the Illinois Treasurer's Office increased utilization of diverse broker/dealers from 1% to 88%. In FY 2014, total assets brokered with MWVD firms was $603 million. In FY 2019, total assets brokered with MWVD firms was $45 billion. That’s 75 times more utilization. Track these results on The Vault.
- Broker/Dealers firms include but are not limited to: Cabrera Capital Markets, Loop Capital Markets, Great Pacific Securities, Drexel Hamilton, MFR Securities, and Mischler Financial Group amongst others.
Policies & Processes
- Garcia Rule: Mandatory inclusion of MWVD Firms in Investment Manager Searches – Require that for every search for an external investment manager, our investment consultants must include at least one diverse-owned manager.
- Preference for MWVD Investment Firms – Policies and procedures establish uniform operating processes across investment divisions for the allowance of preference to qualified MWVD-owned broker/dealers, asset managers, and other service providers.
- Preference for MWVD Service Providers – All RFPs now provide additional points in the scoring process to all MWVD service providers.
- 360-Degree Review of Business Partners – All financial and investment firms seeking to do business with the Illinois Treasurer’s Office must disclose how their firm promotes equity, diversity and inclusion. This includes a 360-degree evaluation, conducted annually through the office's “Equity, Diversity, & Inclusion Assessment”, of diversity among its board or owners, executive leadership, workforce, supplier network, and community activities.
- Corporate and Mutual Fund Board Diversity – The Illinois Treasurer’s Office advocates for racial and gender diversity on corporate and mutual fund boards, which is a critical dimension of effective board performance, through a number of mediums.
- Enforcing Community Investment Standards – The Illinois Treasurer’s Office reviews a banking institution’s record of commitment to its community when deciding whether to do business with that financial firm. Banking institutions with a Community Reinvestment Act (CRA) rating below “satisfactory” are now ineligible to do business with the Office.
- MWVD Business Liaison – Staff are specifically deployed to assist MWVD investment and financial firms in doing business with the Illinois Treasurer’s Office. Contact MWVD@illinoistreasurer.gov.
Investment Services Sought
The Illinois Treasurer’s Office seeks a wide variety of financial services and products from MWVD firms, including, but not limited to:
Investment Management Services
||Cash & Cash Equivalents
|Custody and Safekeeping
|Cash and Check Processing
||Credit and Debit Card Processing
Other Investment Services
As set forth in Section 30 of the State Treasurer Act, 15 ILCS 505/30, it is an aspirational goal of the Illinois State Treasurer to use businesses owned by or under the control of qualified veterans of the armed forces of the United States, qualified service-disabled veterans, minority persons, women, or persons with a disability (“MWVD Persons”) for not less than 25% of the total dollar amount of funds under management, purchases of investment securities, and other contracts. Preference is accorded to qualified businesses that demonstrate or attest that (1) greater than 50% of the ownership interest of the firm is held by MWVD Persons, OR (2) greater than 75% of the firm’s senior managers are MWVD Persons.
As used herein, the following definitions apply: (i) “minority person” means a person who is any of the following: American Indian or Alaska Native, Asian, Black or African American, Hispanic or Latino, Native Hawaiian or Other Pacific Islander; (ii) “woman” means a person who is of the female gender; (iii) “veteran” means a person who (1) has been a member of the armed forces of the United States or, while a citizen of the United States, was a member of the armed forces of allies of the United States in time of hostilities with a foreign country and (2) served under one or more of the following conditions: (a) served a total of at least six months, (b) served for the duration of hostilities regardless of the length of the engagement; (c) was discharged on the basis of hardship; or (d) was released from active duty because of a service connected disability and was discharged under honorable conditions; (iv) “person with a disability” means a person with a severe physical or mental disability that: (1) results from: amputation, arthritis, autism, blindness, burn injury, cancer, cerebral palsy, Crohn’s disease, cystic fibrosis, deafness, head injury, heart disease, hemiplegia, hemophilia, respiratory or pulmonary dysfunction, an intellectual disability, mental illness, multiple sclerosis, muscular dystrophy, musculoskeletal disorders, neurological disorders, including stroke and epilepsy, paraplegia, quadriplegia and other spinal cord conditions, sickle cell anemia, ulcerative colitis, specific learning disabilities, or end stage renal failure disease; and (2) substantially limits one or more of person’s major life activities. Another disability or combination of disabilities may also be a disability if it is determined to cause a comparable degree of substantial functional limitations similar to the foregoing list of disabilities.
For non-investment related opportunities, including RFPs, RFIs, invitations to bid, and other related areas, please visit our Procurement Opportunities page.
Contact the Treasurer’s Investment Team
MWVD firms should contact MWVD@illinoistreasurer.gov to provide an overview of their business capabilities and discuss available investment opportunities. MWVD firms should also download and submit both the Diversity Profile Form and Capabilities Questionnaire, which provides the Illinois Treasurer’s Office with a resource to be proactive in identifying business opportunities with MWVD investment firms. Submit completed questionnaires to MWVD@illinoistreasurer.gov