This is the fifth edition of The Hedge Fund Journal’s biennial 50 Leading Women in Hedge Funds report, generously sponsored by EY. Some 45 women in this report have not appeared in previous reports, published in 2015, 2013, 2011 and 2010. No less than 21 women in this report are portfolio managers of hedge funds. Eight work in sales, investor relations or marketing. Seven are practising lawyers. Four are COOs. Three work at prime brokers. Two are risk managers, two are allocators, one is a finance director, one a regulatory consultant and one a researcher. Women have attained the highest echelons right across the hedge fund industry.
Among the portfolio managers, many work for large hedge fund managers, which run over $10 billion, and several of them have personal responsibility for running billions. They may have been active for as many as 20 years, yet this report is, in some cases, their first media exposure. As credit and alternative lending are of growing importance to the hedge fund industry, it is also notable that women occupy senior portfolio manager roles at many leading credit houses: Avenue Capital, BlueMountain, Canyon, Gramercy, Oak Hill and TCW.
Women such as Ellen Wang, Michelle Kelner and Maggie Arvedlund, who have launched their own companies, generally start with lower assets than the largest male-led launches though the success of Sonia Gardner’s Avenue Capital shows how they can grow over time. It is perhaps surprising when credible academic studies based on large samples and long time periods, such as The Performance of Female Hedge Fund Managers by Nicole Boyson and Rakesh Aggarwal, find no difference between performance of male and female portfolio managers. We think the jury is out on some surveys that suggest that women portfolio managers have generated spectacular outperformance.
In an ideal world, what percentage of top jobs would be held by women? The answer from some quarters is around 30%, to reflect the fact that overall female participation in the workforce is lower. Some firms in the hedge fund industry have already attained this target: roughly one-third of staff at PAAMCO are female. If women have a relatively strong presence in allocation roles, they remain underrepresented in front-office portfolio management positions, versus labour force participation rates. Even in the Scandinavian countries, some of which have highly prescriptive policies on affirmative action for company directors, combined with taxpayer-funded paternity leave, very few hedge fund portfolio managers are women.
One contributory factor could be that fewer girls are choosing to study STEM (science, technology, engineering and maths) subjects. The movie Hidden Figures and the US Government have recognised the contribution that black women made to the US space programme. Though in some countries women do make up a majority of students in biology- and medicine-related science subjects, science in general does not seem to be women’s most popular subject.
Since 1990, the percentage of software engineers or computer programmers who are women has actually declined. Dutch CTA Transtrend and UK-based CTA Aspect Capital are two examples of hedge funds that are acutely aware of this phenomenon.
This report showcases several women in senior quantitative roles, including Aspect’s Anna Hull and Campbell’s Grace Lo. The apparent female STEM disparity is most obviously relevant to systematic and quantitative hedge fund strategies, but, less obviously, many discretionary fund managers are also increasingly making extensive use of quantitative techniques.
Indeed, the technology industry has been criticised for the small number of women in senior management, and employment trends in the hedge fund industry must be seen in a wider social context.
Women are scarce in the C-suites of many other industries. Take aviation, where only around 5%-6% of pilots in both the UK and US are female. We surmise that cultural norms and gender stereotyping could deter women from seeking careers in either managing money or flying planes. This is changing as acceptance of diversity in society allows for more freedom of expression. For instance, in May 2017, an Australian senator made history by breastfeeding her infant in the Senate.
Of course, studying science is only one of many avenues into senior hedge fund roles. The academic and professional qualifications of those in our report show a wide spread. The US JD legal qualification is quite widely held, including by many women who are not actually practising as lawyers. The US MBA is also popular, as are various master’s degrees. Many in the report also have PhDs. Equally, 15 participants, or 30% of this report, have not pursued academic studies beyond the bachelor’s level. Some have taken professional qualifications, such as the CFA or CAIA charters.
After studies are complete, social networking can help career development, and growing numbers of voluntary organisations, in addition to the CFA Institute and the CAIA Association, are helping women with their careers. The organisation 100 Women in Hedge Funds is now called 100 Women in Finance. High Water Women is another group with a wide-ranging membership that has some focus on impact investing. Girls Who Invest is, as the name suggests, focused more specifically on those managing money. The 30% Club in the UK wants 30% of company directors to be female. We do not think that so-called glass ceilings need prevent the advancement of women in the hedge fund industry, but educational and career choices made many years ago could leave some opportunities out of reach.
Overall, we look forward to a steady and continuing growth of women in senior roles throughout the industry.
As the leading global provider of services to hedge funds worldwide, EY is again proud to sponsor the 50 Leading Women in Hedge Funds report and to recognise this accomplished group of women who are making their mark on the industry. We congratulate all of the honorees who have been selected by The Hedge Fund Journal – an impressive group of professionals that is moving the needle and shaping the future of the industry.
At EY, we recognise that our strength comes from our diversity. We also know that an inclusive culture that values our people’s unique perspectives is critical to drive quality and innovation – and a better working world for all of us. As the #1 firm on DiversityInc’s 2017 Top 50 Companies for Diversity list, EY is proud to have earned the distinction of the leading professional services firm for diversity and inclusiveness. We are also extremely proud to have been ranked #1 on their Top Companies for Executive Women list.
Accelerating achievement of gender parity – within EY and in business at large – is an economic imperative. The world can’t afford to wait as long as some estimates predict – another 170 years – for women to achieve gender parity in the workplace. To accelerate closing the gender gap, we need to work together to equalize representation in the workplace, both in established economies and emerging markets. We also need purposeful action by both men and women to recruit, retain and advance women in equal proportion to their numbers and commensurate with the limitless potential they offer the workplace. Together, we can redefine opportunities for future generations of women, forging a lasting legacy of growth, increased prosperity and stronger communities throughout the world.
The world economy is driven by sustainable value and business growth, which depend upon attracting, optimizing and retaining all talent. Women’s advancement and leadership are central to business performance and economic expansion. It’s in every organisation’s and every nation’s best economic interest to fully utilise and optimise the talents of women.
Please join us in recognising and congratulating those truly exceptional women represented in the 2017 edition of the 50 Leading Women in Hedge Funds – not because they are women, but because they exemplify success and leadership, and are an inspiration to those who follow in their footsteps.