Progress in boosting female representation within the asset management sector has been “grindingly slow” over the past decade, despite numerous industry initiatives aimed at achieving gender equality.
Women account for just 13 per cent of the UK fund managers tracked by Citywire in its Alpha Female report, barely changed from 12 per cent last year and only a slight increase from 10 per cent in the ten years that the study has been running.
The UK was in line with the global average, which showed a similarly sluggish rate of growth in female representation. Only 12.9 per cent of more than 18,400 money managers analysed worldwide were women, compared with 12.5 per cent last year and 10.3 per cent in 2016.
Sophie Downes, who co-wrote the report, said: “We’ve heard a lot about diversity initiatives in investment firms, but progress on the overall numbers has been grindingly slow.”
While the absolute level of assets globally being overseen by women has tripled over the last ten years to £4 trillion, that is linked to the rise of mixed-gender teams, which have risen to 14.9 per cent of the funds studied, up from 6.7 per cent.
Baroness Morrissey, the former chief executive of Newton Asset Management, insisted that fund performance data over the past five years backed up the argument made by campaigners that mixed-gender teams are more likely to take a measured approach to risk. Analysis of Citywire data shows that mixed teams delivered the lowest volatility in four of the past five years.
“We know that men and women have slightly complementary approaches to various things, including risk,” Morrissey said. “We complement each other. We think about different needs.”
• Progress on hiring more female fund managers ‘is patchy’
However, almost 80 per cent of funds continue to be run by men or male-only teams, overseeing £11.7 trillion in assets, compared with £548 billion for those run by a single woman or an exclusively female team. The average size of all-male funds also remains larger at £535 million, compared with £362 million for those overseen by women.
A far higher proportion of newly launched funds continue to appoint men over women to oversee their management, with just under 3 per cent handed to sole female managers this year, down from 5 per cent last year, and none to female-only teams.
Being appointed to run new funds is viewed as key because they are seen as the plum posts and can boost personal careers because the company’s marketing muscle is put behind them.
Retention also continues to be a problem, the study found, contradicting the theory that the move to flexible working in the aftermath of the pandemic would benefit female fund managers.
The rate of turnover for female portfolio managers — calculated on the basis of managers being added or removed from the funds in the Citywire database — rose to 44 per cent, compared with 30 per cent for men.
Some asset classes are performing more poorly than others in terms of gender parity, the report found. The lowest female representation remained in commodities and alternative assets such as infrastructure and private equity, at 8.2 per cent and 5.7 per cent respectively. The percentage of female bond fund managers, meanwhile, stands at a mere 13.6 per cent.
Karis Stander, director of culture, talent and inclusion at the UK’s Investment Association, said the industry needed to move beyond simply tracking data points to truly evaluate the importance of culture within asset management companies.
“Should reaching 50/50 be the goal? I’m less interested in that and more interested in whether women feel that they can enter the industry and that they can access the rich tapestry and range of jobs that are out there,” she said.
The report examined just over 29,000 active funds worth $16 trillion in total.
President Trump has led a political backlash against DEI policies
EVAN VUCCI/AP
DEI rollback has encouraged employers to reflect
The second Trump presidency has unleashed a backlash against diversity, equality and inclusion (DEI) targets, which were scrapped by some major American companies and diluted by others.
In February, Goldman Sachs and Deloitte announced they would be withdrawing internal DEI policies. In the UK, the Financial Conduct Authority said a month later that it would not be bringing in any new rules on diversity and inclusion.
• Trump’s war on diversity initiatives divides Britons
Sonia Jenkins, chief people officer at Schroders, the FTSE 100 asset management group, said she felt “very, very lucky” to be working for a UK-headquartered organisation this year, having seen the predicament of her counterparts in the US.
However, the rollback of DEI in the US had encouraged employers to think about what they were really trying to achieve with their gender-parity initiatives, she added. “It’s too easy to get caught up in DEI as a fad rather than as a thing that is important to business. The more data points we have that support that, the more credibility it gives us.”
Karis Stander, at the Investment Association, insisted that asset management groups have maintained their focus on DEI, even if the legal parameters around language had shifted.
“What we are seeing is a shift in approach,” she said. “Some firms are asking whether programmes previously framed as diversity initiatives are really just talent programmes. This kind of reflection can open the door to thinking more broadly about inclusion and access to opportunity.”