Gender parity sees slow climb in asset management field

While there may be more women working in asset management today than a decade ago, the push for women to move up the career ladder needs to be deliberate and will likely take years more of effort.

On top of that, sources in the industry said women have had to work harder to move up to more senior roles.

"When I first joined the market, I was not only the only Asian at conferences I went to, I was the only Asian woman," said Lynn Chen, New-York-based senior portfolio manager at American Century Investments. "Now you see more Asians and more women, definitely." But Ms. Chen noted that she feels women have to be outstandingly capable and hardworking to make it to senior ranks. American Century Investments had $218 billion in assets under supervision as of Feb. 3.

Statistically, the needle has not moved much.

Just 11% of 215 money management firms had a woman CEO as of December, according to Investment Metrics, a Confluence Company, which is a provider of portfolio analytics, reporting and data for institutional investors and advisers. That figure was up from 7% in June 2021.

Further, a March 3 article on Morningstar Inc.'s website said 12.5% of portfolio managers at U.S.-domiciled funds were women in 2022, up 1.5 percentage points from 2019 figures.

If companies weren't sure about the value that gender diversity can bring to their investment teams, they need look no further than research released March 7 by Willis Towers Watson PLC. The consultant found that managers in the top quartile of gender diversity, defined as those with the highest proportion of investment team members identifying as non-male, outperformed those in the bottom quartile by 46 basis points across equity, credit and real assets strategies.

Some companies have started to recognize the importance of having diverse points of view in teams, setting concrete targets, implementing unconscious bias training and introducing networking, mentorship and sponsorship opportunities, interviewees agreed.

Norges Bank Investment Management, the in-house manager for Norwegian sovereign wealth fund Government Pension Fund Global, Oslo, with assets of 12.11 trillion kroner ($1.19 trillion), for instance, has worked toward increasing the proportion of women employees through recruitment, skills and career development, reputation management, and creating a flexible and safe work environment. Of its 572 employees in December, 29% were women, up from 27% a year ago, according to its 2022 annual report. Women comprised 23% of its senior management. "We want to increase the proportion of women working for the fund both in general and at management level," the report said.

But these activities must be continued, and in some areas amplified, to close the gender gap, particularly as the industry has its unique challenges.

For instance, portfolio management is a career where people do not have the luxury of taking a long sabbatical and picking up where they left off years later, said Anh Lu, lead portfolio manager for the T. Rowe Price Asia ex-Japan Fund. The asset manager had $1.4 trillion in assets under management as of Jan. 31.

"We have a long-tenure career where continuity is really important," said Ms. Lu, based in Hong Kong. "If I'm an investor, and I decide to take five years out (to have children), it's very hard for me to come back and start again. It's a career that builds year after year after year."

Ms. Lu is working on an initiative within the money manager to help ensure leave policies are transparent — "because I think women tend to be affected more by leave" — and train employees not to judge others unfairly for taking periods of leave. The initiative also works on specific talent development programs for women identified as having high potential.

That means managers "have to take a very long-term view and hope to put as many talented women into the job at an early age, and hope to retain them so that in seven, 10 or 15 years, they become very senior managers and fund managers."

T. Rowe Price has set goals to have women make up 46% of its global associate population and 33% of senior roles by the end of 2025. As of Dec. 31, female associates at the company held 32.7% of senior roles globally. In addition, 24% of investment professionals and 13% of the portfolio managers globally were female.

Willis Towers Watson's analysis is not an anomaly. Several studies have emerged to show that diverse teams outperform teams that fall prey to groupthink — conformity of thought.

In November, a study by Investment Metrics found that in the first nine months of 2022, women-led portfolios performed 2.6 percentage points worse than their style benchmarks, compared to the 5.3 percentage points underperformance suffered by male-led portfolios.

"All the behavioral science research that has now come out to truly validate the fact that diverse teams have differing views, differing opinions, and having everybody get together to explore those differing opinions really makes for better outcomes. And I think that has now been fully accepted," Anasuya Dhoraisingam, head of institutional and wholesale distribution for Asia-Pacific ex-Japan at Nordea Asset Management, said in an interview. Nordea AM had €239 billion ($255.1 billion) in AUM as of Dec. 31. The firm has 25% women in leadership positions and aims to keep representation on any level of hierarchy capped at 60% for any gender.

There may also be cultural biases that employers make about women — such as being more risk-averse than men — although Ms. Dhoraisingam and T. Rowe Price's Ms. Lu cautioned against enabling those views.

"At the end of the day, any decision we make, particularly in banking or finance, it's all about risk-adjusted returns, right? So you have to be there, make that call, and say, for this amount of risk, am I being rewarded? Have I planned for all scenarios and then make the decision and I find today, a lot of women think that way," Ms. Dhoraisingam said.

Ms. Lu noted, however, that cultural biases about women have shifted over the past two decades. "When I first started I think there was a certain type of perception around what kind of woman or how a woman needs to behave or what kind of woman tends to be able to succeed and become very senior. I think those perceptions have broken down now."

There are other attributes that women may be perceived to have that can also help women in a male-dominated industry.

Linda Gibson, Newark, N.J.-based chairwoman and chief executive officer of PGIM Quantitative Solutions LLC (PGIM Quant), a wholly owned subsidiary of PGIM, thinks that as a woman in a male-dominated industry, she has actually benefited from harnessing her "softer skills" and "emotional intelligence" in her career.

"Often the only woman in the room early in my career, I used my soft skills to build relationships," she said in an interview. "Relationships that led to unforeseen leadership opportunities that I seized time and time again. I found that soft skills flourish in complex global organizations."

Some asset managers have seen positive change within their ranks. For instance, BNP Paribas Asset Management has more than 24.9% female representation — well above the global average of 14% in 2019, according to Morningstar research. Among people in senior management positions, 35% were women in 2022, up from 27% in 2020.

The next step is to build an inclusive culture.

"Diversity is putting women in the position, inclusion is making sure you're included in discussions," said Danielle Welsh-Rose, abrdn's Melbourne-based Asia-Pacific head of sustainability specialists. Assets under management and administration at abrdn were £500 billion ($602.9 billion) as of Dec. 31.

"It's somebody reaching out and saying, I've noticed that you've got strong opinions in this space, I just want to make sure that you had a chance to tell us what you think," she said. "Or if you're trying to speak and you're being spoken over, that somebody in that room is making sure that everyone stops talking so that you can have a go."

"That's a really basic version of that. But there's no point putting people there if they don't really have a voice, or really have a say, or feel included or comfortable in that space," Ms. Welsh-Rose said.

Inclusion could also mean providing flexibility with work arrangements, said Marion Azuelos, Paris-based global head of human resources at BNP Paribas Asset Management.

"COVID was a difficult period but it played a key role in bringing more flexibility in the organizations," she said. "For some companies, almost 100% of the people were working from home and in a way, it has become a habit and embedded a big cultural shift. This flexibility is key for women in the workplace, especially when you have a family," Ms. Azuelos said. That flexibility to work from home remains in place at the firm.