Money managers are creating or expanding programs to increase the number of women in the industry, now a hot topic as high-profile pay and discrimination lawsuits grab headlines and investors press managers to disclose efforts to boost diversity.
"Programs are great but ... (increasing diversity is) hand-to-hand combat," said Joan Solotar, a New York-based senior managing director at The Blackstone Group LP, head of private wealth solutions and external relations. "It is incumbent on me and other professionals at Blackstone to make it work."
The money management industry is still pretty much an all-boys network, at least at the highest levels. Data quantifying the industry as a whole is largely lacking, but targeted findings include:
- Only 9.1% of the CEOs and 6% of the chief investment officers of the largest institutional U.S. money managers were women as of Dec. 31, 2016, according to the most recent Pensions & Investments' money manager survey. While the percentage of female CEOs has risen from 8.5% in 2011, the percentage of women in the CIO role dropped from 7.5%.
- Women make up just 25% of executive employees and 40% of all employees at the 61 companies that entered P&I's 2017 Best Places to Work in Money Management award;
- A mere 9% of partners, general partners and managing directors with check-writing abilities at venture capital firms with fund sizes of $25 million or more are women, according to data compiled by All Raise, a sponsored project of Silicon Valley Community Foundation to increase the number of women in venture capital; and
- A 2017 academic study of mutual fund managers found that all else being equal, female managers are less likely to be promoted and have shorter tenures than male fund managers.
Meanwhile, studies show women in top positions increase company performance. The more women in decision-making positions, the greater the returns for shareholders, according to a 2016 research report by Credit Suisse Group AG. Between Dec. 31, 2013, and midyear 2016, companies in which 25% of senior leadership were women outperformed the market at a compound annual growth rate of 2.8%, while companies with 50% female senior leaders outperformed the overall market by 10.3%, the study found.
Asset owners also believe gender-diverse investment teams perform better. According to a CFA Institute survey conducted in November and December, 55% of institutional investors stated that mixed gender teams would lead to better investment performance results because of more diverse viewpoints.
Firm executives said women are not applying for positions and the women they do hire leave before they can be promoted, often after they have children.
Others, in turn, point to what appears to be an inhospitable male-dominated environment that blocks women from getting hired, especially on investment teams, and from getting promoted or equal pay.
"Women do want a career and they do want to get ahead," Kathryn J. Stokel, New York-based managing director, chief operating officer at private equity fund-of-funds firm Abbott Capital Management LLC. "If you want to keep women, you have to pay them competitively. You can't assume they will work for less."