Citywire’s Alpha Female 2017 report shone a light on how female fund managers are, on average, trusted with fewer assets than their male peers. But, why are investors likely to entrust a male manager with more cash? Sheer weight of numbers or ingrained ideas about investment?
In this exclusive piece, an active female fund manager, speaking under agreed anonymity, shares her current views of the gender dynamics of the industry and the challenges she has faced – and continues to face – as a result.
When my first managerial promotion was due almost a decade into the job, I was thunderstruck when my boss promoted a same-aged male with half as much job experience, and a fraction of my performance and assets, ahead of me.
I was shocked to find out nobody would come to my rescue due to the “ingrained male culture”, although I did receive low-key demonstrations of sympathy, both from clients and colleagues.
Looking back, in this particular case, the stakeholders - owners and clients - were either too weak or hesitant. Nowadays, I start to ask myself whether a quota is the only solution to break up this “ingrained male promoting culture”.
I was never a big fan of quota systems, though. Throughout school, university and entry level jobs, I felt strongly about my capabilities and it’s not without reason I chose a job that leaves me with quantifiable results.
What happened to me did not create a lot of noise: I switched jobs and took some clients with me, but I doubt that all (of the few) young women in finance would be that consistent in their action. As a result, I definitely feel trusted, as a handful of investors followed me to my new job.
After all, there are significant switching costs for asset managers, compared to let’s say fast-moving consumer goods, which leaves the industry way less responsive, hence less efficient.
It turns out the asset management industry is not that transparent and rewards-oriented, after all. Measuring up fund performance against assets raised, performance obviously isn’t the only key to success when it comes to female fund managers attracting investors. Fund raising capability remains very often just remotely associated to performance.
Forget positive discrimination
From my point of view, the question “what can be done to promote female fund managers?” is purely hypothetical. As a private sector player, the question really is “why, as a profit oriented company, should one promote female fund managers?”.
From both a shareholders and clients perspective, I would suggest it clearly makes sense to create a work environment, where women can aspire to get equally promoted as their male counterparts. What drew me into finance in the first place was a "truly diverse working environment based on meritocracy". Why?
It raises competition and competition is good in many ways: it lifts profits, it lowers fees, it increases performance. Excluding women from this game tends to leave the remainder of the staff sluggish, lazy, and inefficient.
From my experience, seeing a sudden decrease in women, be it on company/department/or management level, has always been symptomatic for a group turning into a protectionist old boys‘ club that ultimately destroys shareholder and client value.
Unfortunately finance remains an industry where, until today, it is possible for such old boys‘ clubs to muddle through and go unnoticed for quite some time.
For this reason, I believe it would be a good start for investors having been handed fiduciary responsibility and even obligation for those managing public money to inquire as part of their call for tender about the share of women across the work staff of the asset management firm to be mandated.
I’m clearly not talking about enforcing a 50:50, but zero women in an organisation would certainly seem very suspicious to me.