The NAA created a pension-fund mission statement early this year and then started working on a white paper about the causes of and cures for low participation, according to Ms. Mantilla, who is the New York–based manager of Consultiva Internacional, a financial consultancy based in Puerto Rico.
The white paper was released at the NAA's annual Wall Street Summit in October. Among its conclusions:
•Many Hispanic-owned financial services companies are young, established in the past three to five years. Pension-fund administrators are reluctant to use young companies' services. But "you can perfectly exercise your fiduciary responsibility and still open a fund to new talent," Ms. Mantilla states.
•Because the companies are young, "our networks are fragile," Ms. Mantilla says. "This is traditionally a business reliant on an old boys' network." California and Ohio, however, have begun programs to give more pension-fund business to young companies, she points out.
•In the interests of managing funds for a diverse group of contributors, pension funds should develop clearly articulated action plans and monitoring policies for including a percentage of minority participants in "emerging managers" programs.
•The boards of public pension funds should have an interest in and a plan for inclusion of minorities as directors. In addition, the NAA's Pension Funds Initiative encourages pension funds to consider several steps. •Hire, train, and promote Hispanics to senior management positions in pension-fund organizations.
•Invest in private equity groups that focus on Hispanic-owned companies and those controlled by Hispanic general partners.
•Use Hispanic-owned investment advisory firms for all asset classes, including domestic and international equities, REITs, and hedge funds.
•Urge corporate nominating committees to consider Hispanic representatives for their boards.
•Use Hispanic-owned brokerages and dealers for internally and externally managed funds. Realistically, it won't be easy for Hispanic companies to get a bigger slice of the pension-fund pie, says Jesus Arguelles, owner of Arguelles & Co., an investment banking firm in San Diego. "The pot is so big that changing policies will take years and years," he predicts. "In our community, we're not used to thinking about billions and trillions. Going to Wall Street is a great step, [but] the scale of the challenge to be recognized there in the pension-fund arena is huge." Still, argues Mr. Arguelles, "pension management organizations are becoming aware that management of funds and contributors can no longer be carried out in the old-fashioned way." For example, funds can get more out of their capital with double-bottom-line investing, seeking both financial and socioeconomic returns, and can include more talent by lowering the capital threshold requirements that financial services firms must meet to become involved in pension funds. Change could be evident in three to five years, Ms. Mantilla believes. She hopes that the first crop of Hispanic financial service firms will lead an eventual pack that will include members of the NAA. For Ms. Mantilla, the movement of capital promises a multiplier effect throughout the Hispanic community. "If you look at this from a philosophical perspective, you're building a nation," she says. "The only way the Hispanic community will be able to become fully part of the nation is to create wealth that translates into housing, education, and health care. We know that when we have many successful Hispanic entrepreneurs, they will give back to the community."
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