“Green is good and red is not good“ – this is a lesson my 5 year old daughter has already learned by looking interested in my Bloomberg terminal, when I am working from home. Especially, the coloured performance charts have done it to her. Admittedly, I caught myself hoping that she will adapt my enthusiasm for financial markets one day. At least, this would counter a critical issue we see in the investment industry: A lack of female talents.
Gender diversity as key to success
It is common knowledge today that gender diversity is the key to success for competitive and sustainable asset management companies as well as an important force for innovations. This gained even more momentum during the covid crisis, which dominated our daily lives in the last 2 years. Business models need to recognize the gender shift in the long run, if they don’t want to face an intended talent constraint.
Looking at statistics, there occurs a lot of potential by taken gender into account: According to studies, only 6% of the actively managed funds are currently run by a woman or a female team and 12% are run by a mixed team. This shows the significant underrepresentation of women in the fund industry and may raise the question: How credibly can asset managers sell products, which are managed by people representing only a slide of the population? Shouldn’t the product management match the community and customers you are working for?
This could also fit the company investments: It can be assumed that women tend to invest more in companies, which exhibit diverse executive and advisory boards leading to a positive domino effect. Some asset managers have already recognized this and fulfil actively their role as stakeholder in this case. The advantages are obvious: Usually, women bring in various views, creativity and follow different approaches. These multiple perspectives can be very valuable and beneficial for the business and investment process as they lead to more informed and balanced decision making. There are several studies showing that female fund managers are less likely to take unnecessary risk and therefore deliver better risk-adjusted results in the long term.
Various issues need to be addressed
But how to address the issue of underrepresentation of women in the fund industry? The answer to this question is complex as the reasons for the underrepresentation results from different factors. One argument by women against working in the financial industry is that it is a pure male domain dominated by stereotypically male behaviour, which they are not willing to identify with. This image is becoming more and more outdated. Companies themselves can play an important role in overcoming negative prejudices by being prepared to address these issues.
Apart from this, there is much more they can do: Companies need to create an inclusive environment, in which women are encouraged, can prosper and are able to bring in their strengths to their full extent. Offering flexible working hours promotes the reconciliation of family and work life. Furthermore, specific mentoring programmes are a favourable way for women to get support and valuable advice by other senior female managers. Each of us can individually contribute to the topic as well by being role models for our children. The AllBright foundation has discovered that fathers of daughters hire more women and pay them a higher salary, for example.
Then, the promotion of young talents is absolutely essential: Financial education needs to be a basis module in schools. In this way, the girls’ interest for the financial industry can be aroused at an early stage.
apoAsset has recognized the increasing importance of gender diversity and supports it in various ways. Apart from offering job sharing and flexible working hours, we signed the “Charta der Vielfalt”, a German initiative for more diversity, tolerance and fairness in corporate culture.
In addition, we also support the career network “Fondsfrauen”, a professional network for women in asset management and finance mainly in Germany, Austria and Switzerland. We even won the Fondsfrauen Award 2021 in the category “Company of the year” for our engagement regarding gender diversity.
Diversity in the fund selection process
Nevertheless, it is not only the company level, but also the product level, on which diversity plays a role: Gender diversity is more and more considered as a diversification element in the fund selection process, for example. Currently, the percentage of our invested target funds managed by a woman, a female team or a mixed team is above industry average.
Still some way to go to close the gender gap
To sum up, for asset management companies there is still some way to go to close the significant gender gap in the industry and we need more than just paying lip service. With the result, that one day it won´t be necessary to talk about gender diversity, female empowerment or women’s quota anymore. Instead, we will see gender parity as a matter of course in corporate and political culture. Additionally, I would appreciate, if more women realize the interesting opportunities this exciting industry offers, so that the lack of female fund managers will hopefully decrease with time. This requires educational work not only by education institutions but also by companies. It’s time to act now.