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Categorized | Financial

Number of women in asset management flat lines

Posted on November 28, 2016

The number of women running investment funds globally has not increased since the financial crisis despite a number a high profile campaigns to correct the underrepresentation of women in the asset management market.

Only one in five funds has a female portfolio manager, according to new research examining more than 26,000 funds across 56 countries by data provider Morningstar – a ratio that has not improved since 2008.

The problem is particularly acute in the US, Germany, Brazil, India and Poland where one in 10 funds or fewer have female managers. The study found that women are much more likely to become doctors, lawyers or accountants than investment managers.

Laura Pavlenko Lutton, Morningstar’s director of manager research in North America, said: “Our study’s findings support the hypothesis that women have had limited leadership opportunities in the fund industry, and, in many well-established areas, we have not observed an improvement since the 2008 financial crisis.”

In June a group of Europe’s largest asset managers, including Aberdeen Asset Management, Schroders and Allianz Global Investors, joined forces in an attempt to address accusations that the asset management market is an old boys’ club that promotes and protects the interests of white, middle-aged men.

Almost 30 companies and industry organisations signed up to the campaign, called The Diversity Project, to try and ensure diverse recruitment across the industry in terms of gender, ethnicity, socio-economic background, age, sexual orientation and disability.

Anne Richards, chief executive of M&G, one of the UK’s largest asset management companies, said: “We lost too many women from the industry a few years ago at a critical moment, which has left a big gap. It’s not obvious how to we’re going to fill it.”

The Morningstar data showed women are 74 per cent more likely to run a passive fund that tracks an index compared with one that tries to beat the market, suggesting the ratio could improve along with a structural shift towards passive management. Assets managed in passive mutual funds have grown four times faster than traditional active products since 2007 and now stand at $6tn globally.

Helena Morrissey, the former chief executive of UK-based Newton Investment Management and founder of the 30% Club, an organisation that campaigns to make boardrooms 30 per cent female, said: “The evidence I have seen suggests that while the industry is less popular as a career choice for both sexes now than prior to the crisis, women have been put off more by the generally tarnished reputation of the financial sector.

“Beyond entry level, I also see women becoming disillusioned as they still feel the industry is very male-dominated and therefore it can feel less culturally welcoming.”

In August BlackRock shared data, for the first time, on how many women the world’s largest asset manager employs at a senior level, marking a breakthrough for gender equality. Another six fund houses, Franklin Templeton, Fidelity International, Amundi, Baillie Gifford, Union Investment and Capital Group, also agreed to publish their diversity statistics.

“We’re all working hard on this [but] I think the issue is that it’s very easy to comply at the board level,” said Martin Gilbert, chief executive of Aberdeen Asset Management. “The issue is below that. There is a lot of work to do regarding gender diversity in the top echelons of asset management.”

The Morningstar study showed that Singapore, Portugal, Spain and Hong Kong had better representation figures, with more than a quarter of funds reporting a female manager.

Amanda Foster, global head of financial services at Russell Reynolds, a recruitment firm, said that asset managers were still ahead of other financial services companies such as investment banks and insurers.

However she added that companies were often unable to retain female employees once hiring them. “Hiring is an important element of diversity and most firms do well at the graduate intake level. The greatest issue is retention,” she said.