Women-owned and women-managed funds continue to outperform equity markets and hedge funds as an asset class, but the lack of supply means that even investors who might want to invest in women-managed funds will have a hard time doing so, according to a recent report from the Rothstein Kass Institute (link to full report below).
The report found that 93% of investors don’t have any particular intention or mandate to invest in women-managed funds, but many of them say it’s because there are too few options available to place such a restriction on their portfolio. Even so, while 73.5% of respondents don’t think that their allocation to women-managed funds will increase in 2014, 24.5% think that it will increase slightly and 2% expect it to increase significantly.
“Women remain more common in financial, compliance or operations roles within the alternative investment industry,” says the report.
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Younger funds have more equal representation
While there has been some gradual improvement in C-level positions, the percentage of female investment committee members has been stagnant, with just 9.4% of companies reporting that women make up at least half of the investment committee. “Women tend to be better represented on the investment committees of investors, hedge funds and venture capital firms,” says the report. “Private equity funds remain behind the curve.”
Changes to gender imbalance can trickle up slowly, especially in industries or companies where senior positions don’t have a lot of turnover, so it’s no surprise that younger funds were more likely to have equal representation, with 24.3% of newer funds having at least 50% women on their investment committees compared to just 3% of large funds.
Women-Managed Funds outperform the market
Rothstein Kass isn’t the first firm to point out that women-managed funds tend to outperform. Whether you think this is due to a difference in approach or a selection effect (if only the best can overcome institutional sexism, those who do so should have better investment results), the results are pretty convincing. The Rothstein Kass Women in Alternative Investments (WAI) Hedge Fund Index has outperformed both the S&P 500 (INDEXSP:.INX) and the HFRX Global Hedge Fund Index since 2007, and other studies have found similar results.
See full PDF here.