Women in Fund Management: The Report



Launch Partner

Production Partner


J.P. Morgan/Highbridge Capital Management


Mary Ann Casati, Trustee/Trio Foundation
Mariam K. Chamberlain
Amy Goodfriend/Goodfriend Partners LLC
Edith A. Hunt
Kathleen McQuiggan/Catalina Leadership
Sharon and Chelsea Prince


Jim and Subha Barry
Pete and Devon Briger
Mayree Clark/Silverleaf Foundation
Dina Dublon
Nina Hughes/LightKeeper Investments, LP
Delia M. Marshall
Pluscios Management LLC
Irene Tse
We also thank the Ford Foundation for its on-going support of the National Council for Research on Women.

The Report

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  1. The Report [pdf]
  2. Report in a nutshell
  3. Action Steps

In the report, Women in Fund Management: A Road Map for Achieving Critical Mass – and Why it Matters, the National Council for Research on Women argues for greater diversity in fund management and calls on the financial services industry to implement a Critical Mass Principle with measurable action steps to bring more women into the field. Achieving critical mass will confer the vital benefits experienced in other sectors when significant numbers of women are included in decision-making as well as the distinct advantages that women bring to financial management.

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We must look to women as:

  • an important component, in partnership with men, of the new and existing talent needed to create more effective and sustainable models for economic stability and growth;
  • a significant source for alternative perspectives, understanding and risk-management styles for regulatory and reporting systems;
  • an underutilized population with the expertise and commitment needed for the work of rebuilding trustworthy, stable and sustainable financial institutions.

Below is a brief summary of the report.

Where Are the Women?
While half of U.S. investment capital comes from women, women are severely under-represented on the other side of the desk.  Women represent a scant 10 percent of traditional mutual fund managers and an even lower percentage in alternative investments fields. Only 3 percent of approximately 9,000 hedge funds have a woman in charge.

The Rise and Fall of the Market: Over the past decade, the financial services sector has exploded in size and, according to many, become disproportionately and unsustainably large. In particular, hedge funds have grown tremendously, to an estimated $3 trillion of assets at the peak of the market. With the global economy in crisis, due in large part to failures in the financial services industry, it is time for change. We need to examine what that change will look like and how to rebuild a system that is sustainable over the long term.

Managing Risk: Researchers have identified differences in the investment styles of men and women. They have found that, on average, women tend to be more consistent investors, holding investments longer and processing a greater level of informational detail, including contradictory data, in making decisions. On the other hand, men tend to manage actively, trading often and basing decisions on overall schema. This research debunks the myth that women are less effective money managers than men. Systematic management of risk needs to benefit from the talents of both genders to create a sustainable, stable system.

Capital Punishment: Despite the evidence that women offer sound balance in investment decisions, they remain largely under-represented in investment fields, especially hedge funds. One of the prime reasons is that, in general, access to capital is a much greater challenge for women than it is for men. For example, only about 4 percent of venture capital money flows into women-owned businesses, although women own one-third of the total. According to recent research, the money invested in female-managed funds is significantly lower than that invested in male-managed funds, even when women and men managers have the same level of risk aversion, similar returns on investment and other comparable characteristics. This difference may reflect gender stereotyping as well as lower levels of advertising and visibility for women-managed funds.

Is the Pipeline the Problem? Girls and women tend to step off the path to a career in fund management at almost every step of the way. From elementary and high school, where girls tend to drop out of math and science classes, to college and graduate school, women tend to sidestep hard sciences, advanced mathematics and business courses. The number of women enrolled in MBA programs has stagnated at around 30 percent, and even those who do graduate tend to avoid careers at hedge funds and mutual funds and in other high stakes investment fields.

Barriers and Biases: The negative impact of stereotyping on women in the workplace has been documented since the 1970s, and stereotypes in financial services continue to limit women’s roles largely to support services. In one survey, 75 percent of women in private equity said their gender was a major impediment to success in the field. These stereotypes, combined with the highly competitive culture and the long hours and travel often demanded by these jobs render the field uninviting, causing talented women often to look elsewhere for opportunities.

Networks Needed:
Networking is the mechanism in financial services for attracting and retaining clients and investors, building collegial relationships and advancing careers. Yet women have historically struggled to gain access to prime networking opportunities, especially in such fields as hedge funds, where legal and cultural pressures have not opened doors for them. Thus, women are forming their own networks – 100 Women in Hedge Funds, 85 Broads and other organizations, such as the National Council for Research on Women’s Corporate Circle.

Money Is Power: Although women account for half of the country’s investment wealth, their collective power to support and encourage women in fund management is just beginning to be felt. Circle Financial Group, Golden Seeds, Women Moving Millions and the Women’s Funding Network are some of the organizations that bring women of wealth and women entrepreneurs together to invest in ways that advance women across the economy. The industry today is ripe with opportunities to create new products and services that will further women’s success and advancement in the field.

Change Can Happen: While the financial services sector has been dominated by men, there are a number of women who can serve as models for success. And, as many people in the field point out, success trumps gender when you look at the bottom line. A number of women have successfully pursued careers, attaining the highest levels even in the relatively closed world of hedge funds, and according to some experts, firms are increasingly seeing women fund managers as an untapped but highly competent pool of talent.

Action Steps

The first step in seeking solutions to any problem is the realization that a problem exists. With the current economic meltdown, problems in the financial services sectors are front page news. The search for solutions has become a loud national call for comprehensive structural change in the industry and in governmental regulatory mechanisms as a whole.  This crisis thus provides the opportunity – and the imperative – for fundamental change within our systems and among the individuals who work in and lead our financial services sector.

As part of the discussion of the challenges ahead, the National Council for Research on Women challenges corporate and financial leaders, policy makers and governmental regulatory and oversight agencies to create deep change in the structure, culture and practices of the financial services industry.

1. Recognize and address the complex interconnected and global nature of this crisis. This is a crisis that reveals in stark outlines the interdependence of the private and public sectors, of the Wall Street and Main Street economies and of national and international institutions. It has undermined our trust in our financial system, called into question aspects of our free market system and renewed calls for a more responsible form of capitalism. This is not a time to restrict the pool of leaders, decision makers and administrators to a thin sliver of our population. We must draw on the expertise and talent of the full range of our population – women as well as men – in order to find innovative solutions to the crisis.

2. Adopt a critical mass principle. Strive for broadly representative leadership in financial services, including executive, officer and board levels. Research in related fields has shown that with a critical mass of women in leadership roles, “magic seems to occur” in terms of changing the dynamics, decision-making process and culture. Women bring new perspectives and consider different issues while making decisions, and they tend to use a more collaborative leadership style, increasing win-win problem-solving. At the same time, they are also more likely than men to ask tough questions and ask for more detail and substantiation.1 Increasing the number of women at the top is the right thing to do and the smart thing to do – for individual institutions and the industry as a whole.  To achieve this critical mass principle, the following action steps are needed:

  • Convene a group of industry leaders – including women – to determine what a specific “critical mass principle” for women in the financial services industry needs to look like, including quantifiable criteria, benchmarks and guidelines for developing adequate numbers of women at all leadership levels to have an impact on decision-making.
  • Draw on the lessons and strategies from research on similarly male-dominated fields, such as electoral politics and science, math and engineering, to begin to change the underlying culture and ultimate patterns of behavior and decision-making in the field.
  • Develop critical mass principles to ensure significant representation from other under-represented groups.

3. Put money where it matters. Address one of the major impediments to women in fund management and other entrepreneurial fields – that is, the lack of capital flow.

  • Require that those who make investment decisions on behalf of institutional investors, such as pension funds or endowments, seek out investments and investment managers that represent more diverse perspectives and experience as well as superior risk-adjusted returns.
  • Encourage women – and men – of means to use their wealth as a force for change by investing in women-managed funds and/or women-friendly companies.
  • Identify and create visibility with more advertising and media coverage for successful women-managed funds.
  • Highlight research that shows that women-run funds and businesses tend to have results comparable with men-run enterprises when the playing fields are level, so that more investors consider a woman manager or woman-owned equity for investment.
  • As customers and shareholders, exert pressure on companies to implement investment policies that support diversity.

4. Require greater transparency and accountability. Most experts are already pointing to the need for more detailed reporting and governmental regulation and enforcement in financial services, especially in hedge funds and other arenas that have been largely unregulated. Gender equity and greater diversity at all levels of the field should be part of that discussion.

  • Require registration of and reporting about fund managers, including those in hedge funds, so that the diversity of the field is visible and can be addressed.
  • Require transparency about fund performance and fee structures so that regulators and investors understand the real risks and outcomes of investments.
  • Enforce fairness-in-employment laws across the whole sector, and ensure that non-discrimination language is put into any new fund regulation policies that are drafted.
  • Ensure that the leadership and staffs of regulatory agencies are diverse and include a diversity of perspectives and experience. The revolving door between Wall Street and regulatory agencies limits the infusion of new ideas and perspectives and gives the impression, at the least, of lax oversight and enforcement.

5. Expand the pipeline. All roads leading to careers in finance for women should be widened.

  • Provide more support and encouragement for girls and women in elementary, high school and higher education to pursue math, science and technology studies at the highest levels, and address the conditions that lead girls and women to drop out of those fields at each stage of their education. Research has shown that addressing climate issues, reforming curricula and implementing strategies to make classes more “girl-friendly” improve educational results and retention. In particular, classes that emphasize group learning, link academic work to social goals and encourage individual achievement over competition increase academic success.
  • Make career paths in financial industries more visible and appealing to high school, college and graduate students, who in general do not consider them for their future.
  • Shine a light on successful women in the field to create role models and call attention to the excitement and rewards of a career in fund management.
  • Provide mentors, boot camps, information about educational and experiential requirements and other kinds of support to prepare women for careers in financial fields. In particular, emphasize the importance of math and physics to high school and college students as a path to lucrative and rewarding careers.
  • Address issues in MBA programs that have kept the enrollment of women at less than one-third of the total, and provide counseling and encouragement for women to consider financial services as a career.
  • At the professional level, apply the lessons learned in other industries and draw on the best practices developed by diversity professionals to recruit, train and retain top talent, including women. Mentoring, affinity networks and other such practices offer support to women and others who, according to research, tend to opt out of fields they perceive as hostile or incompatible with their other responsibilities. Programs and practices that encourage retention of women have been proven to increase commitment and retention of all employees.

6. Build and expand professional networks. Research has shown that supportive networks are critical in encouraging women and other under-represented populations to stay and excel in inhospitable fields. Formal and informal networks in economics and science, engineering and technology, for example, have expanded the number of women in professional and academic positions.

  • Encourage interested women to form more networks such as 85 Broads, 100 Women in Hedge Funds and Golden Seeds, where mentoring, role modeling, mutual support and information sharing can take place. Research has shown that similar networks for women in engineering and the sciences, such as Mentor Net, can have a significant impact on retention and success rates. Networks such as the Corporate Circle of the National Council for Research on Women provide opportunities for women and men in these fields to exchange knowledge and ideas and hear from experts whose research and insights can inform efforts to broaden and strengthen the field.
  • Implement workplace policies used in other industries to provide supportive networks for under-represented populations. For example, affinity groups within companies or email networks like Systers, a cyber network for women in technology, provide safe spaces to seek advice, explore career options and share ideas.
  • Create more networks for women investors and philanthropists, and build greater awareness of the ones that already exist. Organizations such as the Women Donors Network (www.womendonors.org) and Women Moving Millions (www.womenmovingmillions.org) provide encouragement and support for women investing in women-managed funds and organizations.
  • Provide more opportunities for gender-balanced networking by bringing more women and other under-represented populations into traditional male-dominated networks and by inviting men to participate in the newly created women’s networks.

7. Provide mentoring opportunities at all levels. Research shows the efficacy of mentoring in helping all employees make wise choices and reach their optimal career objectives. Without a helping hand reaching down through the pipeline, women and other under-represented populations tend to opt out of fields such as fund management where historical biases and practices block their progress.

  • Encourage informal mentoring at all levels. Teach women to form their own “boards of directors” to help support and guide them throughout their careers.
  • Institutionalize formal mentoring programs within firms and through outside networks that match younger women with more experienced women and men in the field to provide perspective and wisdom and to encourage professional growth.
  • Provide opportunities for peer-to-peer mentoring, especially to help higher level professionals navigate their career ladders.

8. Highlight the achievements of successful women in finance to provide role models for other women. Putting the spotlight on women fund managers and financial leaders challenges the perception that women are not well-suited for careers in finance. It provides an impetus for women already in the field and for others who are considering a career in finance.

  • Create opportunities such as awards and honors to draw attention to successful women.
  • Demand that professional groups and the media include women and other under-represented populations as spokespeople, commentators and interview subjects.
  • Encourage women to put themselves forward as experts and spokespeople to help make women’s expertise and talent more visible.
  • Take advantage of media focused on women, such as SheSource (www.shesource.org), the Women’s Media Center (www.womensmediacenter.com) and Women’s eNews (www.womensenews.org), to increase women’s visibility and participation.
  • Encourage successful women to take leadership roles in professional organizations and to participate in women’s networks.

9. Change the climate and culture. A chilly workplace climate – caused by subtle sexism, long hours, rigid expectations and, in extreme cases, sex discrimination and harassment – has often made the financial services field deeply inhospitable to women.

  • Develop a persuasive business case specific to each company for expanding diversity and retaining diversity initiatives, particularly at this time of economic downturn.
  • Ensure that downsizing and consolidation do not act as covers for gutting programs that increase women’s participation.
  • Conduct research to shine a light on both subtle and more overt forms of sexism in the financial services industry.
  • Ensure that leaders in the field communicate their commitment to building workplaces where everyone can succeed at the level of her or his capacity. This commitment must be institutionalized at all levels of the company’s hierarchy.
  • Support and empower women and their male allies to confront discriminatory behavior and practices in their workplaces.
  • Train women to deal with workplace biases in ways that advance their own efficacy and success within their organizations.
  • Explore opportunities for flexible work arrangements, particularly within the less rigidly structured hedge fund industry, for both women and men seeking to strike a balance between work and personal life.

10. Support and fund research in the field. To develop effective solutions, we need to understand the problem and measure results. We need to know:

  • where women are and are not located in the field of fund management;
  • the results for women managers in terms of performance, customer base, long-term profits and overall portfolio stability;
  • in particular, the performance results from 2007 to 2009 for men and women fund managers;
  • the career trajectories for women who succeed in the field;
  • what deters so many women from pursuing careers in fund management, and why they step off the path to successful careers at various points;
  • which policies and practices need to be put in place to ensure that the field draws on the best talent and a full range of perspectives and investment styles

1Kramer, V. W. , Konrad, A. M., & Erkut, S. (2006). “Critical mass on corporate boards: Why three or more women enhance governance.” (Wellesley Centers for Women, Report No. WCW 11). Wellesley, MA: Wellesley Centers for Women.