Senior women missing from asset management

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In 1985, Marcia Page got the assignment that launched her career as an investor. His manager at Cargill asked him to analyze and advise on a high yield bond. Page’s recommendation ultimately led to a $ 5 million position in the title.

Eight years later, Page co-founded Värde Partners, an alternative investment firm that now manages $ 15 billion in assets. She remains grateful to her boss at Cargill for involving her in a key investment decision that would allow her to build her resume with solid background and get her noticed.

But over the next three decades of her investment career, she was disappointed to find that such trust from top management is rare for women in the industry, especially those in the early stages of development. their career. Few people reach leadership positions without having a history of valuable assignments.

“I thought we were all making progress,” Page said. Her eagerness – and frustration with the status quo – to help women succeed led her to found MPowered Capital, a company that invests in female and underrepresented talent, in September.

While asset managers have made strides in recruiting more women for junior positions through college associate programs and other efforts, they haven’t made as much progress in their promotion to positions. superiors. According to Preqin, only 12% of the top ranks of private equity firms, for example, are made up of women. The lack of progress comes even as many traditional and alternative businesses have committed to making changes and set public targets for hiring and promoting women.

According to Morningstar, only 11% of fund managers in the United States are female at the end of 2020, including those in open and exchange traded funds in equity, fixed income and allocation strategies. The percentage has remained unchanged over the past decade. Individual funds managed only by women fell to 2% in 2020, from 6% in 2001.

According to Kate Ahern, Managing Director and ESG Head of Cartica Management, a company that invests in emerging market equities, college pipeline programs are working. “But the real problem seems to be that many asset managers can’t keep women for very long,” Ahern added. “Women don’t stay in asset management for as long as their male peers. This translates into fewer women in leadership positions. The pandemic has exacerbated this trend, with several studies showing that professional women are leaving the workforce for various reasons.

There are many reasons for the absence of women in senior investment teams and in other management positions. On the one hand, they are paid less and are promoted at a slower pace than their male colleagues. They are also responsible for a greater share of household chores as their partners are likely to have demanding careers, according to Page.

“Why would they be in a more expensive profession but with less potential? Page said.

Another barrier for young women in the business is the lack of high-level role models, according to several female executives in asset management companies. Kate Burke, COO at AllianceBernstein, said that was the reason she joined the board of directors of Rock The Street, Wall Street, a non-profit organization that provides high school girls with knowledge about finance. She wants to let young women know that “finance is something they can do well”. If girls need role models, the industry needs more women overall.

Sometimes investment firms have an “unconscious bias” against women’s ability to be good investors, according to Linda Zhang, CEO and founder of Purview Investments, which focuses on exchange-traded funds. This negative bias is still present, even though there is a whole body of solid research showing women generating similar performance or outperforming their male counterparts in all asset classes and in all time periods. At the same time, there is a diversity bonus in public company stocks when there are more women in all leadership positions. Despite this, Zhang said women are sometimes seen as more risk-averse and reluctant to pursue innovative investment strategies.

In 2012, Zhang left his role as fund manager at MFS Investments to lead an ETF research team at a competitor. It was a risky decision, she said, as ETFs were a fairly new concept at the time. But she said she had the courage to act early and ended up building a successful business in the now established industry.

There are several ways to increase the number of women in senior investment positions, according to Elizabeth Havens, who is recruiting senior investment talent from research firm David Barrett Partners. For example, to help young women get the most out of diversity programs, the company’s leadership team should communicate with them regularly about ways to get promotion and build personal relationships.

Burke suggests that frequent and honest discussions about the challenges women face in the investment world would also be helpful. At AllianceBernstein, she is a founding member of its Women’s Board of Directors, where she helps identify talented women across the organization, encourages them to actively pursue leadership roles and seize opportunities. when they arise.

Women themselves should apologize less and feel less guilty for not always being able to perfectly manage both their careers and household responsibilities, Burke added. A family and corporate support network is necessary for a woman to succeed in a demanding investment career. Other women said businesses need to be creative and offer tangible support services, even if they are expensive.

Havens said recruiting and supporting diversity are “probably at the top in American companies,” giving mid-career women the opportunity to assess what they really want from a job in the industry. asset management.

At the same time, the pandemic has proven that investing and other professionals “don’t need to be in the office to do well,” which can be useful for female investors who “don’t want to choose between work. and family ”. according to Sloan Klein, career coach for executives in the investment management and financial services industry.

“In general, more men in investment management have housewives, and more women have working husbands,” Klein said. “There is therefore a heavier family obligation on [women.]”

Klein said that before the pandemic, many senior and mid-level professional women asked her for advice on working from home, but “suddenly it’s not a conversation anymore.”

“I think this will be a way for companies to retain talent,” Havens said. “Allowing this flexibility allows for a better work-life balance and the needs of many women. “


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