Female hedge-fund managers have outperformed their male counterparts by a wide margin since 2007, according to research compiled by KPMG and published in the recent white paper Breaking Away: The path forward for women in alternatives. And yet, 79% of the more than 300 female alternative fund managers, investors, and other professionals said they believe it is more difficult for women to succeed in the industry. How can this be?
Held to the Same Standard
“This year’s report demonstrates that many industry professionals believe women-led funds lack investor access and visibility despite better performance than the industry,” said Kelly Easterling, KPMG Audit partner and co-author of this year’s report, in a recent announcement. “But women are not asking for special treatment, they want to be held to the same standards as their peers, whether male or female.”
Women aren’t asking for special treatment, and they’re not receiving much, either. Only 7% percent of investors surveyed have mandates to invest in women-owned or -managed funds, and they typically allocate less than 10% of assets to these managers. But such mandates shouldn’t even be necessary, considering how the HFRI Women Index of women-owned and/or –managed funds and firms have outperformed the broader hedge fund universe almost every year since 2007.
HFRI Women Index Performance
For the five years ending in June 2015, the HFRI Women Index has returned 6.25%, compared to 5.13% cumulative returns for the HFRI Fund Weighted Composite Index and 1.54% for the HRFX Global Hedge Fund Index. Since January 2007, women-led funds have generated total returns of 59.43%, trouncing HFRI’s 36.69%, and HFRX’s negative returns for the period.
“There are a lot of excellent women out there who warrant capital and already have proven performance,” said study participant Kate Mitchell, co-founder and partner with Scale Venture Partners “But there’s a dearth of women being developed through the talent pipeline. If firms proactively compiled diverse candidate slates to interview, we could really move the needle.”
One concern voiced by some survey participants is that mandates give the impression that women have earned their business on the basis of their gender, rather than because of their ability to generate strong returns. The performance of the HFRI Women Index however provides clear evidence that women-owned or -managed firms deserve to be included in the mix of managers considered by investors.
For more information, download a pdf copy of the white paper.