female-lead hedge funds outperform the industry by 20%

female-lead hedge funds perform better

Ever heard a man say 'women don't reach senior positions because they're too emotional'? I have, and it's infuriating! It's infuriating because:

1) Emotions are a good thing. They help us decide what's right and wrong.

2) How dare someone define a woman's success based on a ridiculous gender stereotype.

BUT, I'm so glad that women are in fact proving this statement very wrong.

Did you know that hedge funds run by women perform better than those run by men? This isn't something that has been achieved recently though, over the past decade female-run hedge funds have outperformed the industry by 20%!

But, hedge funds run by women have a higher failure rate, why? Because female portfolio managers struggle to raise capital, partly due to the lack of news media about hedge funds run by women compared to male-lead hedge funds.

Women tend to have a slightly different approach to risk and analysis, leading to more profitable investment decisions. Employing more female portfolio managers could help hedge funds, but instead only:

1 in 20 hedge funds employ a female portfolio manager

1 in 10 UK fund managers are female

14% of partner-lead positions in global hedge funds are represented by women

So let's just hire more women to improve the performance of the hedge fund industry, right? Unfortunately, it's not as easy as that and these recruiters explain why... 

a hedge fund recruiters point of view

An interview with Michael Goodman, a recruiter for Long Ridge Partners,' said that 'most funds want to hire the best talent. They don't care if it's a man or woman. Typically, they're going to find the male universe is larger'. To be honest, this is a fair point, but why is it that hedge funds find themselves recruiting from a male-dominated pool of candidates?

Another recruiter, David McCormack, CEO of DMC Partners, found that women tend to lack in the skills required for long-short term equity, a very common investment strategy, and women only made up 5% of those with these skills.

Elizabeth Havens, a recruiter at David Barrett Partners, explains that hedge funds usually recruit via word of mouth. She says 'unless you're explicitly asking [for diverse candidates], the numbers are on the men's side'.

So how do we overcome this? Does society see banking as more of a 'man's job'? Could it be that women don't have enough female fund managers to look up to? 

If that is the case, then here are some successful female hedge fund managers who are kicking ass:

  • Leda Braga, who runs Systematica, the quantitative hedge fund
  • Sarah Dahan at BlueMountain Capital Management
  • Grace Gu at Graham Capital
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So, if anyone ever tells you that women are too emotional to reach senior level positions, ask them why women are leading a billion dollar industry.

  

Lots of love,
Ramona
xxx

Founder of Rani & Co.

 

 


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