Hedge Funds Make (Slow) Progress Towards Gender Equality

Stockholm (HedgeNordic) – According to a recent international analysis by DHR international, the global executive search firm, women now represent 12% (1 in 8) of partners at hedge funds, private equity firms and other investment partnerships, up from 10% the two previous years. The data, provided by the Financial Conduct Authority, shows that out of 3,509 partners at regulated firms in 2015, 405 were female.

According to DHR, this means hedge funds and private equity houses are outperforming the financial sector services overall in terms of gender diversity at the senior level. Though the increase may be slight, the findings show an increasing recognition of the benefits to innovation and performance of wider diversity at the leadership level, and point the right way forward.

“Women still remain a small minority at the executive committee level,” says Stéphane Rambosson, managing director and head of financial services at DHR International. “The fact that hedge funds and private equity houses are doing better than the overall financial services sector challenges the ‘boys club’ reputation that they have been associated with in the past.”

“As progress is made in boosting numbers of women at the top across other industries, the financial services sector may come under pressure to do the same,” he says. “As that happens, competition for the best talent is likely to heat up. Firms could reap rewards by taking a more pro-active approach now.”

DHR also finds that the proportion of women on FTSE 100 boards is now 26%, while at FTSE 250 companies it is 20.4%.

Still, a recent Business Insider expose found that the climb for women in the hedge fund industry remains steep. According to BI, women held only 3% of senior investment roles in hedge funds in 2012, according to CIO (Chief Investment Officer), a trade publication.

Among the reasons for this, it appears a focus on performance over hiring practices, a shortage of specific strategy experts, a difficulty in penetrating established networking practices among men, unconscious biases, and the perception of hedge funds as embodying an “aggressive culture” that might be off-putting, were named as the main culprits. A recent investigation from Institutional Investor also found that bias, culture and a harsh business environment are keeping women at the margins of the hedge fund industry, suggesting networking and emerging manager programs as potential remedies.

As the U.S. appears to be at the cusp of electing its first female President, the question remains whether the struggle for gender equality will be as long and generational in the investor community as it has been in politics. Nonetheless, it is worth recalling that a woman jointly created the first hedge fund index. Thirty years ago, Lee Hennessee-Gradante helped create the Hennessee Hedge Fund Index to track investor return figures, the first of its kind in what was still a highly secretive industry. Mrs Hennessee-Gradante died just last week.

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