The Black Lives Matter movement has prompted a national discussion on racial equity that is reaching all areas of society and the economy. People of color have long been underrepresented in, and neglected by, the financial services industry. Women are also proportionately underrepresented in the sector in ownership and management positions, as well as rank-and-file employment. Few hedge fund managers currently have formal structures in place to correct underrepresentation, and research shows that organizations often perceive themselves as more diverse than they actually are. In conjunction with an open-minded work climate, however, diversity can lead to a number of benefits, including stronger performance; fewer errors; increased creativity and cooperation; and greater empathy. The first article in our four-part series discusses the lack of diversity within the financial services and alternative investment management industries and explains why fund managers should focus on increasing diversity. The second article analyzes diversity training; performance ratings and hiring tests; grievance procedures; and specific actions managers can take to promote diversity and inclusion. The third article explores implicit biases, their harms and whether they can be reduced in both the short and long term. The fourth article evaluates methods for constraining decision making and examines the role that legal and compliance leaders can take to promote diversity and reduce implicit biases. For more on diversity, see “How University Endowments Approach Diversity at Asset Managers and Racial Equity in Investments” (Nov. 12, 2020).