Diversity in Financial Services

Citywire Alpha Female Report 2019

Dr. Nisha Long
Head of Cross-Border Investment Research, Citywire

Now in its fourth year, the report draws on Citywire’s exclusive database of 16,000 individual portfolio managers worldwide.

Citywire’s latest Alpha Female report highlights the painfully slow progress the asset management industry is making on gender diversity.

Just 10.8% of the fund managers in our global database are women – a figure that has barely changed since we first produced this analysis four years ago. Despite all the noise and all the right words being said, the fact remains that not enough has changed. Over four years, the number of female managers is still at 10%. Will this be the case in another four years? It’s not about who can shout the loudest, real action is needed.

Glacial change

Martin Gilbert, chairman of Aberdeen Standard Investments, suggested client pressure was working against efforts to equalise the numbers. ‘It’s going to be glacial, the change, because clients want zero percent change and that’s the issue,’ he said.

However, the reality is that far more men are still being promoted in the biggest sectors. In two of the biggest sectors, Equity Europe and Equity Global, only seven women have been added in the past year versus 106 men. Why are females not promoted into big sectors or having that path cleared for them earlier in their careers? We have shown through our research that female managers have proved their worth through performance and enhance a mixed team’s performance.

Niche sectors: not by choice?

The investment sectors where the number of women managers have increased in 2019 so far are Equity Hong Kong, Equity Global Themes, Equity Europe Income, Bonds Europe High Yield, Bonds Euro Medium term, Bonds Euro Inflation Linked, Equity Biotech and Equity General Industry, which are all considered as niche sectors.

There’s no evidence either that women end up running niche strategies because they have qualifications that naturally lead them into those sectors. They don’t tend to have specialist degrees, which might explain why they are pushed into these areas. In fact it is quite the opposite. For many of the female managers active in these niche sectors, their educational background is in finance, economics or business.

I believe asset managers should be asking themselves why there isn’t better female representation in larger sectors such as Equity Europe or Equity Global. Women fund managers have proven their worth in the niche sectors with asset gathering as well as performance which if given the chance they could replicate in larger sectors.

Mixed teams offer a bright spot

In 2018, Citywire’s research established that mixed teams consistently deliver better returns, while also taking less risk, than male-only manager line-ups. It is this aspect of our 2019 research that has produced the most encouraging findings. Overall, the percentage of funds run by mixed teams has risen from 8.4% to 9.2%, continuing a steady upward trend that has seen this figure increase by 50% over the four years we’ve
been running the Alpha Female analysis.

The rise of mixed teams is encouraging and the industry is getting women more involved at the front line of asset management and also more involved in mainstream sectors.

For more information on award winners and to purchase the full alpha female report please visit: citywire.co.uk/alpha-female