Can you imagine a world where women manage 30% of the world’s investable capital by 2030? We can and should. Here’s why: while less than 10% of all US fund managers are women, there is an estimated $11.2 trillion market of investable assets controlled by women. In other words, women are in direct control of 39% of investable assets in the US, and strongly influencing the other 61%. By 2030, women are expected to become primary investment decision-makers for two-thirds of the nation's wealth. Unfortunately, 67% of women say their financial advisors misunderstand them.
Back in 2014-15, the World Economic Forum convened leaders from private equity funds, pension plans and academia with the aim of determining what can practically and realistically be done to address this gender imbalance among investment professionals. The resulting formal recommendations to fund managers not only made the business case for a gender-diverse financial industry being better prepared to meet the financial priorities of all of their clients, but also presented an action plan for recruitment and career advancement. Recently, the team revisited the question of how is “#Wherearethewomen?” being addressed. Here are three targeted ways that organizations are making an impact:
1. Building partnerships to train and market high-potential non-traditional applicants
Driving the vision of having 30% of investable capital managed by women is Girls Who Invest, a non-profit founded in 2015 by Seema R. Hingorani. To achieve this goal, it has partnered with the University of Pennsylvania and the University of Notre Dame to immerse college sophomore women in a four-week intensive educational program followed by a six-week paid internship in the industry. So far they have empowered close to 400 college women and are continuing to expand partnerships to achieve their goal. “Girls Who Invest aims to make meaningful change in the lives of high-potential women by arming them with world-class training,” said CEO Janet Cowell.
2. Expanding the recruitment pool beyond investment banking
We know that attracting diverse talent starts by broadening the traditional applicant pool and engaging with students earlier in their career search process. Across 25 university campuses, Smart Woman Securities chapters are preparing students for careers in finance through an educational seminar series and the completion of an investment project. Founded in 2007 by two Harvard graduates, Tracy Britt-Cool and Teresa Hsiao, this organization is dedicated to bringing undergraduate women together who are interested in finance and investments.
Organizations are broadening the talent pipeline from education to recruitment. The Women’s Association of Venture Equity (WAVE) is connecting professionals and candidates across the country through career events. The second annual Women in Alternatives Career Forum took place in New York last fall, and attracted professional women and men to encourage a portfolio of gender-diverse candidates to join and persist in the alternative asset-management industry.
3. Increasing visibility of senior women and men as mentors and advocates
A long-lasting commitment to gender diversity and inclusion in asset management and the finance industry as a whole will require a focused approach by the entire industry community. Level 20 and the Private Equity Women Investor Network (PEWIN) focus specifically on initiatives to retain mid- to senior-level women in private equity. Level 20, a UK organization founded in 2015, has a mentorship program for mid-level women to be mentored by senior-level women and men. “An industry that has an image of being male-dominated does struggle to attract women,” said Jeryl Andrew, chief executive of Level 20. Mentorship programs help bridge perceptions of accessibility to senior-level positions with women and men as mentors and advocates. Since 2007, PEWIN’s worldwide member group has hosted regular events that unite women in senior leadership roles to network and discuss topics related to the women’s movement in private equity and finance. Kelly Williams, senior advisor at GCM Grosvenor, chair and CEO of PEWIN said: “It’s very difficult for junior women in the industry to think about a career and making it to the top without role models. For us, it is very important that the women who are at the senior roles, even though they are small in number, stay in the industry and see themselves as a role model.” Bridging the communication gap between senior-level and mid-level professionals is essential to retaining talent in the industry.
This is a worldwide movement.
100 Women in Finance (100 WF) is an organization with 15,000 members worldwide dedicated to empowering women at every stage of their careers in finance and alternative investment industries. They have collaborated with Girls Who Invest, Smart Woman Securities and other organizations on projects like Investing in the Next Generation Initiative, focused on building a stronger pipeline. Elaine Crocker, president of Moore Capital and vice-chair of 100 Women in Finance's Global Board, congratulated 100 WF for having “played a huge role in advancing women by providing a tremendous network of resources globally run by über-bright ladies”. Women connecting with each other from across the globe will bring the global financial industry closer to diversified gender representation at the most senior levels.
However, it’s up to firms in the industry to make the biggest impact.
Developing a talent pipeline that focuses on women can increase the number of eligible candidates, but it is up to the firms to hire, promote, and pay talented women equally. This requires a clear commitment from leadership teams to increase gender balance and new thinking about issues like family leave. Incorporating a gender-diverse lens in all recruiting, hiring and promoting practices will take focused and intentional effort. There is a change on the horizon, as more women and men in the industry commit to greater gender diversity because as Theresa Whitmarsh commented, not only is this a social issue but “it's becoming a fundamental business competitive issue”.
This blog is part of a World Economic Forum series focusing on gender diversity in the investment industry. Read other entries here: