Hedge Funds Helmed By Women Outperform

Jan 10 2013 | 2:27pm ET

Women-owned or managed alternative investment funds outperform the industry but women remain underrepresented in the ranks of fund CEOs and CIOs, according to a new report from the financial services firm Rothstein Kass.

The report surveyed 366 senior women in hedge funds, funds of funds, private equity and venture capital, as well as service providers to and investors in alternative investments.

It found that women hold the highest percentage of C-level jobs within the operational space, at 35.0%; followed closely by C-level compliance and financial positions, at 34.0% and 32.0%, respectively. The percentage of women CEOs and CIOs currently averages less than 20% within the firms polled.

But a look at the numbers suggests more women should be in those 'chief' level jobs: The Rothstein Kass Women in Alternatives Hedge Index produced a year-to-date net return through September of 8.95%, compared to the HFRX Global Hedge Fund Index, which was up 2.69% through September. Furthermore, over a five-year period, the Rothstein Kass WAI Hedge Index outperformed both the HFRX Global Hedge Fund Index and the S&P 500.

“The fact that women-owned or managed hedge funds have been able to handily outperform their male counterparts is not particularly surprising,” said Meredith Jones, director at Rothstein Kass, in a statement. “There have been a number of studies that show women investors to be more risk adverse, and therefore potentially better able to escape market downturns and volatility. The outperformance by women-owned or managed hedge funds should make the case that investing in these types of funds is a smart business decision, rather than one that just feels good.”

Kelly Easterling, principal-in-charge of Rothstein Kass’ Walnut Creek office, said in a statement that the report showed “a lack of women in portfolio-related C-level jobs, which typically act as a proving ground for future fund managers.”

Asked to explain this shortage of women, respondents offered two primary reasons: 1) lack of available positions in the industry where a woman can develop a track record; and 2) desire—women lacked motivation to enter or stay in the industry.

Of the respondents, 10.5% said women represented 50% or more of their firm's investment committees while 37.3% said there were no women on their investment committees.

Hedge fund respondents were the most likely to have women-owned or managed status (16.8%) followed by venture capital (13%) and private equity (12%).
 

 


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