Female hedgies kick dust in their male counterparts’ faces

LONDON: Hedge funds run by women have fallen only half as much in the financial crisis as those managed by men. The value of female-managed funds has dropped by 9.6 per cent in the past year, compared with 19 per cent for the rest, according to Chicago-based Hedge Fund Research.

Women investment managers have also performed better over the past decade, with an average annual return of more than 9 per cent, while hedge funds overall delivered 5.82 per cent. The findings were showcased in a research paper presented at the Women’s Forum for the Economy and Society in Deauville, France, at the weekend. They are supported by Hedge Fund Research’s diversity index, which tracks the performance of other minority groups along with women. Funds run by women accounted for roughly 50 per cent of the index, which returned an average of 8.21 per cent a year since 2003, compared with 5.98 per cent for the field as a whole.

Despite women’s apparent prowess, in early 2008 they were running only 3 per cent of the $1.9 trillion then invested in hedge funds. Female hedgies, such as Leda Braga, at London-based BlueCrest Capital Management, are a tiny minority.

The paper by the US National Council for Research on Women says they suffer “capital punishment”, finding it harder to raise the finance to start up fund management firms and experiencing more difficulty in attracting money from investors. The average size of funds run by women and minorities is $73.7 million, compared with $308.2 million among men.

One female asset manager said: “With a man ... you might dismiss something as a bad day, with a woman it’s seen as a sign of instability. Somewhere, buried deep in the psychology, is the notion that people don’t trust us with their cash.”

The NCRW argues a better mix of male and female investment styles would lead to greater market stability. Linda Basch, its president, called for a change in the chilly workplace culture for female investment professionals and said women needed to gain critical mass in the finance industry: “It is uncomfortable to be the only skirt in the room. This is a time when we need women, with their more tempered approach to risk, as well as men.” Jacki Zehner, a former partner at Goldman Sachs, who initiated the report, said: “Where women are present at decision-making tables, the quality of those decisions improves.”

NCRW’s work supports the views put forward by investment banker Ros Altmann and Professor Charles Goodhart of the London School of Economics at the Treasury select committee on women in the City last week. They argued the financial crash was less likely to have happened if there had been more women in senior positions in the industry. Goodhart said their more cautious and long-term outlook could prove a more positive trait than the aggressive, risk-taking stance of men.