Stockholm (NordSIP) – This week, independent financial publishing company Citywire published its sixth annual Alpha Female report, taking the pulse of diversity and inclusion in the asset management industry worldwide. Drawing on Citywire’s database of over 16 000 managers in charge of more than 25 000 mutual funds, the report is one of the most comprehensive studies describing the current state of D&I affairs in the industry.
Can we really wait until 2069?
“It’s encouraging to see D&I is taken seriously within the asset management industry,” comments Dr. Nisha Long, head of ESG and cross-border investment research at Citywire. Encouraging as it might be, the fact remains that since the report was first published in 2016, the overall percentage of female fund managers has risen only slightly, from 10.3% to 11.8%. And while mixed teams have almost doubled in six years, gender parity could still be a lifetime away. According to the report, despite a slight pickup in the pace of change, we cannot expect to get to parity before 2069.
Looking for explanations, the authors of the report point to the higher turnover rate among female managers, 44%, compared to their male peers at 31%. It seems that while firms are increasingly doing well at attracting the next generation of female talent, they are seeing attrition in the middle ranks. “There are many initiatives encouraging more women to take senior positions, but as we’ve highlighted in previous years, all these policies mean nothing if female managers are not retained,” says Dr. Long. Looking for potential solutions, Citywire lets the CEOs of some leading fund groups share their thoughts on how they plan to tackle the turnover problem.
The lagging Nordics
For a Nordic reader, pouring over the numbers of the report might hold some surprises. Despite their long tradition of gender equality, the Nordics are nowhere near the top of the ranking. Spain and Italy lead the way in Europe with 22% and 21% female fund managers respectively. Worldwide, it is the Asian countries that score highest. Hong Kong continues to shine on both percentages of female managers (28%) and mixed teams (also 28%). Asian-based managers are also overrepresented on the list of top-rated female portfolio managers. Singapore is heading towards gender parity in just 12 years, decades ahead of any other major market.
Within the Nordics, the numbers are much lower. The local leader, Sweden, can boast with only 16% female fund managers and 7% of funds run by mixed teams. On the other hand, Denmark and Norway are to be found at the very bottom of the league globally, with only 6% female fund managers running funds domiciled in each country.
However, at least one of the lists in the report features a local star to be proud of. Angelica Hanson, who has been managing AMF’s small-cap fund since 2006, makes it to the very top of the best-rated female fund managers globally, based on three-year risk-adjusted performance to 31 May 2021.
If we truly believe that diversity of thought has a direct correlation to alpha, it is evident that more asset management firms need to commit to promoting D&I. The report is a valuable reminder that fund managers should put more effort into attracting and retaining female talent internally, not just demand that the companies they invest in do so. “With the rise of ESG, investors are asking fund management companies to look inwards before looking outwards,” concludes Dr. Long.