27four Investment Managers
29th May 2009
Financial Mail: Women Fund Managers
Eye on the money
By Sharda Naidoo
Women managers are still a rarity in the world of fund management
Is the proverbial glass ceiling finally starting to crack? According to the CFA Institute,
the percentage of active female chartered financial analysts globally is just 19%.
In the UK, only about 3% of fund managers are women. In the US, only 12% (44) of
managers of the 200 largest US mutual funds are female. But in SA, finding actual
statistics on the number of female fund managers in this high stakes, testosteronedominated
world is as rare as the professional herself.
Less than 1% of the R3 trillion in retirement funds under management in SA is managed
by women. More worrying is that one tenth of that 1% is managed by black women,
according to 27four, SA’s first black-owned and women-run institutional multimanager.
Delphine Govender of Allan Gray, Kelebogile Moloko of Prowess Investment Managers,
and Fatima Vawda, founder of 27four, are among the handful of SA’s top black women
Numbers aside, the pinstriped suit world of fund management is changing. Women,
says new international research, now hold the upper hand in this asset management
industry. Female traits, such as risk aversion and attention to detail, make women better
fund managers than men, according to a poll conducted by the Financial Times – Ignites
Europe. In fact, most women fund managers even blame the world’s financial woes on
“It’s our nature of social upbringing to look at all angles …
women tend to be more strategic” – FATIMA VAWDA
Vawda, SA’s first woman hedge fund manager, is
one proponent of the argument that the world
wouldn’t be in this financial mess if money was
managed by women. Obsessed with taking risks,
determined to win at any cost and fuelled by
testosterone, it is men – from “respectable” bankers
such as Sir Fred Goodwin to out-and-out fraudsters
such as Bernie Madoff – who have landed the world
in this economic mess.
“The global financial crisis has highlighted a lot of
flaws in the markets and economy – poor compliance,
regulation, accountability, risk management and pure
neglect. In this respect, men are more to blame,”
says Vawda. “Because women strive harder to
succeed in this male-dominated industry, they want
perfection and are more thorough. It’s our nature of
social upbringing to look at all angles, and from a behavioural point, women tend to be
She says women generally tend to have a better work ethic than men. “Women tend to
be a little more complete. We look into the nitty-gritty of everything. We shouldn’t feel
that we are in a profession that is dominated by males. In fact, there are a lot of hidden
benefits that go with our gender – people might be more receptive and accepting.”
Financial Mail – Eye on the money Page 1 of 3
Intuition and the ability to manage time are important attributes for fund managers, and
these are commonly considered to be female traits that give women an advantage over
men in fund management.
“It surprises me that there are not more women in fund management as it is not a pure
science, and women should excel in this environment,” says Gail Daniel, portfolio
manager and director of Investec Asset Management. In 1994 Daniel was just one of
two women fund managers (the other was Anet Ahern, who now heads research at
Sanlam Investment Management Global) of the 66 unit trusts that existed.
According to the Ignite poll, women make better managers because they are more
“methodical, loyal and consistent”.
Says an asset manager from a US-based fund manager: “Decisions of risk are weighted
appropriately with other factors like compensation and the next career move. They do
not ignore gut feelings. To generalise, when men go shopping, their approach is that of
a hunter who must conquer; so portfolios tend to reflect the behaviour of a herd –
ignoring their instincts.
“By contrast, when women shop they are goal-orientated and approach it as an
experience. The benefits are that they tend to invest more time to spot trends and
independently use multiple senses to determine value before making a decision.”
These views are supported by new findings by French fund association AFG, which
show that equity funds managed by women have produced more consistent results than
those managed by men, over a five-year, three-year and one-year period. The results
show that though female-led funds are rare among the top performers, they are less
frequently found among those products at the bottom of the performance table and are
less volatile than funds run by men.
Anne Cabot-Alletzhauser, chief investment officer of Advantage in SA, attributes
women’s success to a lack of ego. “As guardians of long-term assets that must serve as
the ultimate financial safety net for millions of employees in their retirement, women are
likely to be far better at understanding the importance of that fiduciary role and far less
likely to fall prey to the high-testosterone game of performance one-upmanship that
invariably undoes the best long-term prudential strategies,” she says.
“As sexist as that sounds, I think it’s a tremendous advantage to be a woman in this
business. My deputy chief investment officer is the best I’ve ever had – and she’s also a
woman.” The fact that seven of the team of 13 asset managers at Advantage are
women “says something about how valuable their skills set is”.
However, a male respondent from a global asset management house believes the
differentiator is one of risk tolerance, not gender. “A man who is risk-aware will
outperform a woman who is not over time,” he says.
But some even suggest the economic crisis will benefit women in the long run as they
have lower levels of risk appetite. Investec Asset Management chief operating officer
Kim McFarland, who has been with the firm since 1993, recognises the need for more
women in the asset management industry. “I don’t believe women are represented
enough at the moment. It seems to me that women sometimes approach risk in a
different way to men, and in some cases they may choose not to take risks that are as
great,” she says.
“In the current environment, this is what is needed. Women are also strong negotiators
and understand the bigger picture without being swayed by short-term financial gains.”
However, others believe comparing men and women does not reflect the reality of the
workplace any more. Says Allan Gray director Govender, one of a few black female
portfolio managers in SA: “In terms of the actual function being fulfilled and what is
expected of you, gender is entirely irrelevant in this job.” But there is a lot of “baggage”
women in this field have to contend with.
WHAT IT MEANS
“In my experience, due to the dominance of men in many senior roles – be they in the
investment industry; management of companies we invest in; or trustees/custodians of
clients whose assets we manage – gender has the propensity to play a role in terms of
preconceived ideas of what men believe women are good at or how strong or capable
we are (or aren’t).”
Magda Wierzycka, CEO of Sygnia Asset Management, agrees that women face many
challenges in this “high-pressure, aggressive and competitive” male-dominated industry.
“Women often struggle to be taken seriously – their opinions are ignored and discarded.
Being able to voice one’s opinions passionately and loudly, while ignoring the critics, is
Women generally have to work harder than men to be recognised. “One reason men
achieve more while working less is that they market themselves well. Women just get on
with things and hope that recognition will come to them,” says Wierzycka. “Often it does
not. Women are different from men in that they tend to be a lot more emotional. This is
often regarded as a weakness to be exploited.”
Thick skin, outspokenness and self confidence are essential to survival. Wierzycka
offers some words of wisdom: “When women reach senior positions, they are criticised.
If critics cannot fault their work, they focus on their looks, personalities and so on.
Learning not to be oversensitive to criticism, particularly of the personal (and hence
irrelevant) kind, is essential.”
However, since being a woman in investments is still a rarity, it’s much easier to stand
out. “Women can add a lot to an investment debate as they tend to approach things
from a more intuitive perspective. To be able to do that one needs good communication
skills and the confidence to rock the boat. This may not make one popular with the peer
group, but work is not a popularity contest,” says Wierzycka.
Whether popular or not, it’s very easy to measure how good a fund manager is. They all
live and breathe by performance tables, so it’s possibly easier to be completely unbiased
about gender. It is also a more predictable life: while investment bankers, lawyers and
accountants may end up having to work through the night when a big assignment
arrives, fund management is rarely that demanding. “It is not strictly a 9-5 job, so some
things can be done outside normal working hours – clock watching doesn’t ensure good
performance anyway,” says Ahern.
Most women fund managers agree though that juggling work and family is a fine
balancing act. “I’m not sure there is such a thing as balance… you need negotiating
skills, to be fairly organised, have back-up plans and be able to accept and ask for help.
It’s also crucial that you stay focused on what is important and shut out distractions,” she