U.S. pension funds are allocating more to diverse money managers and taking more steps to measure how their assets are allocated and articulate formal policies on their processes.

This is the second year Pensions & Investments has surveyed the top 200 U.S. retirement plans regarding defined benefit plan assets managed by money management firms owned by women, minorities, people with disabilities and veterans.

As of Sept. 30, respondents said a total $120.7 billion was managed by WMDV-owned managers, up from $68.4 billion a year earlier, according to P&I data.

Plan executives are taking a more thoughtful approach to investing with diverse managers given the resurgence of the focus on underrepresented groups in the past several years, said Lauren Mathias, San Francisco-based senior vice president and head of the diversity, equity and belonging initiative at investment consultant Callan LLC, in an interview.

Plan executives are thinking “we need to figure out what our belief system is about diversity and implementing diversity into our program,” Ms. Mathias said.

This includes incorporating that belief system into investment policy statements and including a diverse-owned firm in every manager search process they undertake, she said.

The result is that more plans are making direct investments with diverse managers when historically that exposure has primarily been through manager-of-manager programs, Ms. Mathias noted.

One such plan sponsor that has newly established its diverse-manager processes is Raytheon Technologies Corp., Waltham, Mass.

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