The financial industry has long been dominated by men, whether in banking, insurance, or hedge fund management.
Even today, it has emerged that women occupy just 15 per cent of senior positions in the City’s hedge funds.
A new study that was exclusively shared with City A.M. found that, within hedge funds, only one in seven of the senior management team members are female.
The new report by IG Prime analysed the correlation between fund performance and female leadership in the UAE, UK, Singapore, Switzerland, and Australia to reveal whether gender has an effect on the growth of assets.
Katja Bergman, general Partner and Co-Founder at BRIGHTLY Ventures, noted how her team took many more meetings than their male counterparts, even when other factors like age and team size were equal.
“I don’t know if [the difference in volume of meetings] is female-male. We went to the same [investors], and we were in the same structural programs, but we got less than the men.”
“The investments we got from private institutional funds were a result of long relationships built over the years, previous track record and a large volume of meetings,” Bergman said.
She did also note that we shouldn’t be focused on gender bias at all; “It’s not all women, it’s not all men, it’s the mixed teams that’s the recipe; those are the ones that excel.“
But whilst only a proportion of women occupy these senior positions, what effect does gender have on a hedge funds performance?
There is no consistent correlation between female leadership and either positive or negative fund performance – the gender of leaders has no particular effect on the funds performance, IG stressed.
This is despite the lower proportions of women in leadership roles across international funds.
When making investments in funds, the focus should be on people’s past performance and intended strategy for the funds. Due to the unique nature of funds it remains a wise decision to tailor each investment decision to each fund.
There was no notable positive or negative correlation between female leadership and performance, the research found.
Fund managers should therefore make a clear effort to support equality and equal opportunities in the workplace.
The varying strategies in male and female approaches is a good indication to show that decisions should be made based on the individual and how suitable they are for the role regardless of gender.
Male vs female management
Worldwide, there is no evidence to suggest gender affects performance of funds short, and long-term. However, the amount of women in leadership positions remains minimal and globally only 14.5 per cent of these roles are held by women.
The UK had one of the highest proportions of female leadership across the research- 16.2 per cent. There was, however, little correlation between female leadership and fund performance short-term.
After five years of female management UK funds saw a marginal increase in performance, 0.39, implying that long term it may be a somewhat beneficial decision from a financial perspective to hire women for senior positions.
Of all senior fund management teams, only 14.8 per cent of members overall were female in Australia.
While the performance results after one month of female leadership present a decline, the five year performance results are mildly suggestive of increased performance.
Singapore had one of the lowest gender equality of all countries – only 7.7 per cent of all senior staff were female. They also presented a negative correlation between female leadership and performance with a decline of -0.17 after three years of female management.
Switzerland had one of the highest proportions of women in leadership roles of all markets – 16.2 per cent.
However, there was no significant correlation between the gender of leadership and the performance of the fund. The only significant metric was that of month 1 results, where there was a decline of 0.29 in fund performance.
The UAE had the lowest proportion of female leadership along with Singapore– only 7.7 per cent.
The UAE did however show the highest signs of correlation between female leadership and fund performance. In the 12 month and 3 year performance metrics there was a significantly positive impact on fund performance following female leadership.
These correlations were not, however, visible in the short term metrics, suggesting female leadership that surpasses three years has led to advantages, the researchers concluded.