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For an industry judged on its performance figures, investment management is proving a laggard when it comes to the number of female fund managers it employs.
Latest global statistics say just 12.5 per cent of portfolio managers — the front line of investment decision-making — are women. “What’s even more surprising is that this number has declined over the past decade and appears to be stagnating rather than progressing at a significant pace of change,” says the Diversity Project — an industry body set up to encourage more women and ethnic minorities into asset management.
In terms of countries, the Netherlands and Brazil are among the worst offenders, with just 5 per cent of portfolio managers being women, according to data from industry publication Citywire. And two markets that might have been viewed as more progressive, the UK and the US, are also languishing below the global average, at 12 and 11 per cent, respectively.
“This is damaging for a number of reasons,” says Dame Helena Morrissey, chair of the Diversity Project and former chief executive of Newton Investment Management. “It makes the industry look backward compared with others that have made further, faster progress — such as medicine, law and accountancy. And that creates a chicken-and-egg situation: young women might feel put off joining an industry where they perceive fewer opportunities to advance.”
Gina Miller, campaigner and founding partner of wealth manager SCM Direct, agrees. “[The figures show] a shameful stagnation in an area that should be progressing much faster, especially in the face of the increasing wealth of women and their professional advancement elsewhere,” she says. The gender gap is still a topic of conversation, she adds, because of “the systemic barriers women face at every stage of their career” in investment management.
Miller cites a 2021 study from industry body the CFA Institute, which found that more than three-quarters of women working in the investment industry believe it is biased towards men. “It is a problem that is embedded within recruitment processes, promotional decisions, and workplace culture,” she says.
The added bewilderment, for some, over the dearth of female talent comes from studies that show gender-diverse teams produce better investor returns. “A lack of women isn’t just a fairness issue, it’s a missed financial opportunity,” notes Miller.
Research company HFR, for example, found that female-led hedge funds outperformed male-led funds between the dotcom crash in January 2000 and the global financial crisis in May 2009. Analysis from Goldman Sachs found all-women and mixed-gender US fund teams outperformed all-male portfolio management teams in 2020, during the initial period of the Covid-19 pandemic.
“I think men and women tend, on average, to bring slightly different experiences and approaches to issues, and so it’s not surprising that the best investment teams combine both,” says Morrissey.
Bev Shah, co-chief executive of City Hive, which campaigns for a more diverse investment industry, recognises this. “It is important that we don’t comfort ourselves that issues related to diversity in finance have been solved just because we have talked about them previously.”
In the UK, at least, it appears that there is some hope. The Diversity Project’s 12-month training programme for women, launched last year, offers technical boot camps, networking events and help with career development. The curriculum has been designed by past and present portfolio managers.
In 2023, the scheme had 60 participants from 33 companies, which has grown to 80 participants from 43 companies this year. One hundred women are signed up for 2025.
“Of the 60 participants in the first cohort, 27 have already achieved promotions, 13 of which are to portfolio manager roles or similar,” says Morrissey. Some companies, she recalls, did not think they would be able to find any women to send on the programme but they ended up with 10 times as many applicants as places.
“But the biggest impact, and something I completely underestimated, is the power of the community,” she says, adding that many of the women are the only portfolio managers in their company. “But, when they walk into a room with us, there are 79 others with similar ambitions.
“That is so powerful. And so, I am — for the first time in 37 years in the industry — confident we are on the verge of a breakthrough.”