The alternative assets industry falls behind when it comes to gender representation. Our Expert Voices examine the benefits of a diverse workforce and initiatives for better inclusion.
The alternative assets industry falls behind when it comes to gender representation. Our Expert Voices examine the benefits of a diverse workforce and initiatives for better inclusion.
The relative absence of women in senior positions becomes clear early on the career ladder. Many female employees report finding it difficult to move from entry-level positions to the first rung of management and beyond. Research identifies a lack of sponsorship from firms and the underestimation of women by male superiors as two key factors inhibiting female professionals’ advancement.
A study by McKinsey & Company shows that organizations with more women on their executive teams significantly outperform those without, and companies with greater gender diversity among senior staff are more profitable. But the alternatives industry is still a long way from gender equality. According to Preqin’s Women in Alternatives 2023 report, women account for less than 16% of senior positions across alternatives, although figures vary slightly between asset classes.
We spoke with some industry experts about how gender inclusion works in practice, what active advantages such initiatives offer, and how firms can benefit from diversification.
What challenges are still facing the industry? What new practices to address those challenges make you hopeful?
Vicky Hudson, Senior Investment Manager, abrdn
One of the few key tenets of investing that we can agree on is diversification. For the most part, we have quantitative methods by which we can measure diversification: efficient frontiers, correlation matrices, value-at-risk measures, among others. But what about non-quantitative forms of diversification? Diversity of thought or investment approaches are tougher to model but are critical for building well-rounded portfolios. There is well-documented evidence supporting the benefits of diversity within any team. More perspectives lead to higher-quality decision-making, better ability to attract and retain talent, and improved business results and longevity. As we think about the different ways in which we can source diversity of thought, gender diversification is paramount. At abrdn, we offer a simple investment solution, designed to support hedge funds managed by women: the abrdn HFR Women Access Index Fund. The product tracks an index comprised of hedge funds where women play a key role in the management of a portfolio. The index uses a passive, rule-based approach to inclusion that we believe will encourage the promotion of women to senior positions in hedge funds through proactive diversity flow.
Anna Raptis, Founder and Managing Partner, Amplifica Capital
Diversity is the key to an organization’s ability to adapt. Different world views create a more innovative and flexible workplace, allowing organizations to tackle a wide array of challenges. Diverse teams not only make better decisions but increase profitability. To tip the scales of diversity in alternative industries, organizations must commit to hiring and mentoring under-represented individuals. This commitment will encourage others to enter the industry, not just because the door has been opened, but because they have seen those that look like them reach the top. As the saying goes, ‘you can’t be what you can't see.’ According to McKinsey’s study, women are 25% more likely to outperform on profitability. As such, leadership teams have started implementing initiatives to capitalize on the opportunity for their companies. For example, women apprenticeship programs built within organizations help aid this complex problem. In industries where hiring and retaining women is a challenge, these programs will set women up for success and highlight those who are eligible for promotions. Women are and have long been poised not only to be part of these industries, but also lead them into a new era.
Maggie Kwok, Head of Funds and Regulatory, Asia, and Head of Transactional, Hong Kong, Harneys
I am a strong believer that the best corporate culture encourages and values every person as a unique individual and fosters a sense of belonging that ensures everyone feels part of the team. Almost every major company proclaims a commitment to gender diversity. Some do so because it is the right thing, others because it works well for public relations. Still, some do this with the conviction that diversity can provide a wellspring of creativity and innovation. As a leader in alternative assets, I hold this conviction close to my heart and our firm commits ourselves through initiatives such as unconscious bias training and education on gender-based discrimination. Flexible work hours and family-friendly benefits can also play an important role in removing barriers that have traditionally made it difficult for women to succeed in their careers.
Both men and women belong in all places where decisions are made. As Ruth Bader Ginsburg would say: ‘real change, enduring change, happens one step at a time.’