“We do have statistics that we are not proud of,” said a manager at one UK asset manager about gender diversity. “But we have a clear commitment to doing something about it.” That was in 2004.
Fast forward to 2016 and the CFA Institute, effective gatekeeper to the sector, noted that fewer than one in five of its charterholders were women: “The most enduring principle of sound investment management is diversification, yet it is remarkably absent from team construction across all spectrums of the investment profession.”
Or as the diversity head at a large UK asset manager said last year, when launching its latest rules for portfolio companies, “if you’re only selecting from 50 per cent of the population, how are you going to select the best people? It’s not statistically possible.”
This sector, which espouses the value of diversity for better decision-making and acts as enforcer at the companies where it invests, has failed to make great strides itself. While UK asset managers have appointed more women to their boards or executive teams, the picture for those managing money is still incredibly male.
The percentage of female fund managers is stuck at 12 per cent globally, according to Citywire’s latest Alpha Female report this month. Not only has this moved up by just 1.7 percentage points since the analysis started in 2016, it has now basically ground to a halt.
Progress over the past year was insignificant. On recent evidence, it will take 200 years to reach gender parity for those running money. Only 5.5 per cent of funds in the Citywire database were headed by a woman. Just a tenth of new fund launches in the past 12 months were assigned to female managers.
The UK has done only fractionally better. The proportion of female fund managers in the UK is 12 per cent, up from 9 per cent in 2016. Even at organisations at the top of the list, like Abrdn at 24 per cent, progress has stalled. The company, whose shares have slumped 40 per cent this year amid questions over its strategy, has got one thing right: it discloses and has set a target for women in investment decision roles, aiming to hit 34 per cent by 2025.
That would be ahead of the goals of the Diversity Project, led by Helena Morrissey, which set an objective two years ago for 30 per cent female fund managers by 2030. Most asset managers flunk the first test of transparency and accountability that they would press upon their investee companies: the sector’s diversity reports don’t tend to disclose figures for who is running funds. (Ethnic diversity is worse: a 2018 report from New Financial concluded that the numbers were so low and the data so bad that most companies didn’t know where they stood).
The situation is embarrassing for the sector, in part, because of where there have been improvements. Industry sources say that the intake at junior levels is gender balanced. In its 2012 fiscal year, only 28 per cent of candidates taking the CFA were female; that has risen to 40 per cent.
Insiders bemoan a problem in the senior ranks that stems back to decisions made two decades ago. Others dismiss that: “The pipeline should have come through by now,” says Nisha Long at Citywire. “It is somehow being blocked off.”
One acknowledged issue is that low turnover of top investment staff is prized by clients and therefore by firms. But New Financial also pointed to a narrow approach to hiring, a culture of presenteeism, a lack of consistency for handling periods of absence in performance track records, and an overreliance on individual line managers for determining pay and promotion.
Broadly, the entrenched idea that fund managers live and die by their performance figures overshadows all other factors, ranging from professional double-standards to a culture that tolerates sexist “banter”. “To be frank, on the core problems we have not moved any further,” says New Financial’s Yasmine Chinwala.
The sector abounds with programmes and initiatives, around recruitment, succession planning, mentorship and more. “I can’t think of anyone who would say we’ve done a great job,” said one industry figure. “But we’re really trying.”
Which for a performance-driven industry, that lays down the law to the rest of British business, isn’t really good enough.
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