Finding Gender Equity at the Helm of Hedge Funds

November 9, 2021 James Heinsman Hedge Fund News

Women have broken every professional barrier and risen to the top of every industry. Yet, for some reason, there are still few senior women in hedge funds and practically zero in investment roles. A 2015 study by Ernst & Young, KPMG, and Morningstar, found that only 2% of hedge funds are led by women, fewer than 20% have female portfolio managers. Dominique Mielle, once a partner and senior portfolio manager at Canyon Capital and now an author and consultant, shares her thoughts on how the hedge fund industry can—and should—be more inclusive.

Client Demand

When clients make requests it behooves any service provider to listen and respond. The same must be true for hedge fund consumers: clients must require hedge funds to include women on their teams and even reject funds that do not. This is the primary external impetus that will necessitate and facilitate change. In 2017, for example, major firms (BlackRock, State Street, and Fidelity) insisted on corporate diversity. Companies with exclusively male boards would not have their support. Today, there is only one S&P 500 company that has a fully-male board. The state of California passed a law requiring all public companies headquartered in the state to have at least three women on their board by the end of 2021. The same kind of requirements should be made for hedge fund leadership. Only these kinds of “forced” changes will actively shift the landscape.

Data-Driven

Leaders in the hedge fund industry need to take a deep and serious look at the extensive research pointing to the corporate and cultural benefits of diversifying their ranks. Profits, progress, and policymaking are all enhanced when teams include a broad range of professionals. It is on colleagues, clients, and consultants to point executives to this information and insist that it be internalized and applied.

Persistence and Perseverance

According to Mielle, it isn’t enough for women to insist on the right to be heard, included, or considered, they must also stay the course and continue to fight even if/when things get hard. Being willing to compete is in and of itself an important step; withstanding internal fracases and awkward office dynamics is part of the job. Research finds that female hedge fund managers perform equally or better than men, fewer assets are attracted to them. This means that women must surpass and outshine men to achieve success and that will only be possible if they remain in the game.

bank, Economy, equity, Hedge Funds, Investment,

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