Tipping the scales. This is where a statistic would usually be, highlighting the

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1 Tipping the scales There are plenty of statistics highlighting the underrepresentation of women in senior roles at hedge funds, but now the industry is taking a more proactive than reactive approach to conquer inequality, writes Jonathan Watkins. This is where a statistic would usually be, highlighting the imbalance between women and men in senior hedge fund positions. Right here would be another figure about how well that smaller percentage perform in their respective roles, and finally the question so why aren t more women running hedge funds? would be presented. When reaching out to some of the most successful women in the hedge fund business, I asked them if they were tired of talking about the underrepresentation of women in hedge funds, gauging whether this was a topic covered perhaps too often. What became abundantly clear was that while they didn t mind discussing the matter, just talking about the current inequality and firing out statistics such as only 3% of hedge funds monitored by index provider HFR are run by women were not going to trigger the desired change. Those numbers certainly amplify the need for change but they do not directly ring it. This is not to say that raising 16 globalcustodian.com

2 awareness of the disparity between men and women in senior roles should be scaled back, but the real story is around what is being done to provide opportunities and encourage women in the industry. This applies to everyone, from young women who may not have even started working yet, to those already in the early to mid stages of their career who are looking to the future. From changing the mindsets for young girls snubbing traditionally male subjects at school, to women in roles at hedge funds having the ability to reach the very top. It s on the women who have already made it, says Monica Landry, head of trading and operations at Farallon Capital Management. Even though you ve got there and think this is great, you have to take on the additional responsibility to make sure the path is easier for the women behind you to get there. You have to take on the additional responsibility to make sure the path is easier for the women behind you to get there. Landry has risen through the ranks at Farallon over her 20- year career. What began when answering a newspaper advert in 1994 to take on a temp role, laid the foundations for a highly successful career at the San Francisco-based hedge fund. By the time Landry had made the move onto the trading desk, the team comprised of 13 employees, with just two women. Her 16-strong team now consists of seven women. Four of which, Landry has helped move up from working on the front desk to their current roles. I do think in general women are still underrepresented in the hedge fund world, but I don t think it s unique to the hedge fund industry, women are underrepresented in a lot of areas in this world, she explains. Part of it is around education so everyone knows what opportunities are out there. Mentorship and having role models is so important. If we can get senior women out there to educate people we are going to get more traction and more young girls having an interest in the area and have a belief that they can do it. From the women Landry has steered to their roles within her trading and operations team, to her young niece who she spent time discussing the benefits of studying topics like mathematics to, Farallon s operations head has placed a significant amount of importance on educating and encouraging her juniors. She says it is on the leaders of the industry to influence change, referring to both men and women in senior positions. Change has been coming more slowly than personally I would like to see. There are changes every day though, from 100 Women in Hedge Funds, to seeing other women rise to the top in other areas like operations. One vision That change Landry was referring to has certainly been aided by the organisation 100 Women in Hedge Funds (100WHF). While the shift in seeing more women in senior roles in hedge funds may have been slower than some would hope for, 100WHF stands as proof that there are in fact a lot of women running funds around the world. Today, the group boasts more than 13,000 members in 20 locations across three continents. This consists of representatives from over 2,800 hedge funds, 1,000 fund-of-funds and 500 institutional buyers. We re going to keep going with these statistics as they are impressive and paint a positive picture of where the industry has progressed to at this point. In its 14-year existence, 100WHF has held over 400 educational events, and raised over $36 million for charity. The organisation has also secured royal backing, announcing in November 2015 that The Countess of Wessex will serve as Global Ambassador of 100WHF s Next Generation initiatives. This came shortly after The Duchess of Cambridge also attended their London Gala in October. It s not about why aren t there so many it is about what we can do as an organisation to have impact on the next generation of women, and what can we do to increase the number of women looking at the finance industry, says Amanda Pullinger, chief executive officer of 100WHF. It is quite clear that there are not enough women in the industry, and we can all talk about what the reasons are, but what we like to do is take action. This approach has made 100WHF a lifetime partner for aspiring women. The organisation reaches out to schools and universities to help them acknowledge the opportunities that are out there for them, while also providing positive role models in the form of women already operating in the industry. Members of 100WHF are encouraged to bring their daughters and nieces to education events, while the organisation also arranges dinners as an open forum for young girls to ask women in the industry any questions they may have. What that provides for these young women is opportunities to see women sitting on a panel, who work in investment roles and other positions in the industry on the stage, talking about topics related to their job, adds Pullinger. That 10 year old girl isn t going to come into the industry next year, but we have to start young, letting young women know that this is a career for a woman and these are the exciting aspects of it and these are the things you get to think about every day and act on. globalcustodian.com 17

3 If we can get senior women out there to educate people we are going to get more traction. Monica Landry, head of trading and operations, Farallon Capital Management Rising through the ranks Monica Landry stepped into the offices of Farallon Capital Management in January 1994 after responding to an ad in a newspaper, and remains there to this day. While her role has changed substantially from what she described as initially being a Jack-of-all-trades, one thing she has held onto has been the same chair for her 20-year tenure, she tells Global Custodian. That chair has come a long way since January Landry began as a temp at the hedge fund, when it had around 10 employees. I started with everything, moving from accounts payable, accounts receivable, taught basic accounting and general ledger, I started closing the books and doing capital allocations, she explains. After a couple of years of raising my hand for everything, they needed some assistance on the trading desk and asked me to switch directions and move onto the trading desk. In 2001, Landry became a partner at the firm and comanaged the trading desk until 2003 when she took over the reign solely. Much like her own journey, Landry has looked to promote and develop junior office employees from within the company and four of her 16-strong trading team actually worked on the front desk at one point in their career. When Landry joined Farallon the trading desk had 13 employees with 1 female partner, and another at another site. Landry s team now consists of 16, with seven women on her team in trading and operations. Tough conversations The group s next generation initiative then provides a resource for women who have been in the industry for less than eight years, giving them a forum in which to ask questions and seek support. This part of the group focuses largely on retaining those women in the sector. For the more senior members of the group, many of them then take on the role of educating and mentoring others. So from the very early stages of their careers right to the end, 100WHF has become a resource and companion for women in hedge funds. I think this is going to be a very powerful tool in retaining women in the industry. People can be open about conversations such as I m thinking of having a family, how will that work with my career, how did you do it? Will someone be there to support me? Those conversations are hard to have in a work-based environment but easier in a forum and environment that is run by 100WHF. It is about being in a culture where you are a minority and how you manage and work with that. The topic of having a family is one on the minds of many women both entering the industry and already working in it. As Pullinger describes, it is an example of one of the more common conversations with their next generation iniative. For one chief financial officer, who preferred not to be named, the perfect work/life balance is almost impossible to achieve while working in a hedge fund, though she equates this to any high-pressured job. Some days I m a bad CFO and a good mother, other days I m great at my job and not an amazing mother, she says. It s not been easy and you can t get it right every day. As a woman there is a lot of pressure society places on you as a parent, though men aren t exempt from that either. She adds that in her situation, even picking the children up from school once in a while brought questions from teachers 18 globalcustodian.com

4 If there s one piece of advice I could scream through this article it is to get on the right path. Jane Buchan, CEO, PAAMCO about why she was there. Ultimately though, she believes it s a decision which has to be made if you want to succeed in a job such as a hedge fund CFO. I ve asked my kids a lot as they grew up if it is okay that I work, she adds, saying her children supported her decision. They helped me make the choice. The importance of organisations and initiatives where women have somewhere to ask these questions is crucial as it s something that will no doubt go through many minds throughout the course of their career. In its 14-year history, 100WHF has been supported by some major names in the hedge fund industry, perhaps none bigger than Jane Buchan, CEO of $9 billion global fund of hedge funds manager, PAAMCO. To commemorate her work, the group recognised Buchan as a Charter Angel for her support. When it comes to inspiring young women in hedge funds, few have done this as well as Buchan. Along with her contributions to 100WHF she also been an integral part of setting up the initiative Girls Who invest (GHI). No limits The idea behind GHI is to give university graduates the best possible shot at not only becoming involved in hedge funds, but ultimately running them in the future. The group s benchmark for success is to have 30% of the world s investable capital managed by women by Buchan believes that in order to have the best chance of achieving this, women need to start on the right path from the first job out of university. Subsequently, GHI targets women in their sophomore and junior year and runs a four-week investment course, followed by placing them in internships in portfolio management. When people leave university if there s one piece of advice I could scream through this article it is to get on the right path and make sure you start in the right place, says Buchan. The accidental entrepreneur Describing herself an accidental entrepreneur to Global Custodian, we wished we could all be so lucky to have such a moment of accidental entrepreneurship. Of course, there was much more than chance behind Jane Buchan s move to start up her own company, which now takes the form of a $9 billion global fund-of-hedge funds manager. Buchan began her career at J.P. Morgan Investment Management in the Capital Markets Group before becoming an assistant professor of finance at the Amos Tuck School of Business at Dartmouth. During that time she also operated as a consultant, evaluating technical strategies and hedge fund strategies. With some initial backing, Buchan set up PAAMCO at the start of the millennium in California and in 15 years has seen it expand to London and Singapore, while growing its assets under management exponentially. PAAMCO has earned more accolades than we can fit in this article, while Buchan herself has become a leading voice in the industry. She supported the formation and funding of the 100 Women in Hedge Funds Association and Foundation (100WHF), and has been honoured by the group as a 100 WHF Charter Angel to recognise her support. In partnership with 100WHF Buchan has been involved in a scholarship initiative which aims to provide qualified and talented women in the alternatives industry access to the well-reputed CAIA Charter. Together they have given out 50 scholarships since Buchan is also on the board of directors for Girls who invest, a group aiming to get 30% of the world s investable capital managed by women by globalcustodian.com 19

5 We have to start young, letting young women know that this is a career for a woman. Amanda Pullinger, CEO, 100 Women in Hedge Funds Leading the charge Amanda Pullinger has been one of the driving forces behind the success of 100 Women in Hedge Funds, resulting in her ascendance to the CEO role in January At 100WHF she leads a small staff team and manages over 350 volunteer practitioners globally, overseeing the operations of the organisation, which now has over 13,000 members. Pullinger was one of the founding board members of 100WHF, before then becoming president and executive director in the years to follow. She is also chairman of the board of The HALO Trust a British organisation specialising in the removal of the debris of war and serves on the Advisory Board of the Oxford Alumni Association of NY. She previously served on the Boards of SkillForce, NYU Cancer Institute and Girls Prep and is a member of the British Academy of Film and Television Arts (BAFTA) and a Fellow of the Royal Society of Arts. Pullinger is a former principal of Aquamarine Capital Management, where she was responsible, over a period of seven years, for managing marketing, investor relations and back office administration for two private investment funds. Pullinger graduated from Brasenose College, Oxford University in 1987 with an Honours Degree in Modern History. She earned an MBA from La Salle University, Philadelphia, in 1998, and received the Academic Award for MBA student of the year as well as the Beta Gamma Sigma designation. It is very hard to not come up from the portfolio side and run a hedge fund. Organisations are so small, it is so much about eating what you kill in terms of the investment return and the P+L that if you aren t actively involved in creating that P&L from an investment viewpoint it is very hard to run a hedge fund. Much like some of the 100WHF events and ideas, and echoing Landry s sentiment of it being on the leaders of the industry, Buchan believes it is down to those already involved in hedge funds to educate young women and make them aware of the avenues open to them. One of the big things that can be done is for women involved, whether it is their own children or their friends children is to push them for those interested in hedge funds and ask why wouldn t you take a portfolio management role? Or an analyst role? Or a research role? says Buchan. Because there aren t a lot of women who start in portfolio management it becomes really problematic. You need all different types of people to run a business. Again, the running theme here is inspiring young girls and letting them know that the opportunities are out there for them if they wish to take it. It s about dispelling the myths of subjects like maths, economics and technology, and the seemingly brutal and aggressive characteristics of trading and hedge fund operations as being roles solely suited to men. Game changer Here s one of the issues, at the end of the day women will be up against men in an industry which is dominated from top to bottom by males. It is therefore fixed in their mindset that they are up against it from the outset. This is where starting to alter the attitudes at an early stage could end up leading to achieving that 30% by 2030 target. A job description goes out for a high level job, explains Buchan, and obviously women are all very different, but in a lot of cases women will read the applications and say, I m 20 globalcustodian.com

6 Numbers don t lie 6.25% 59% 79% 30% 3% Sources: HFR, KPMG five-year returns of hedge funds owned or managed by women as of June 2015, compared to HFRI Fund Weighted Composite Index and HRFX Global Hedge Fund Index, which gained 5.13% and 1.54%, respectively over the same period. total returned by women-led hedge funds since January 2007, against an industry average of 36%. of respondents to a KPMG survey said they believe it is more difficult for women to succeed in the hedge fund industry. the desired benchmark of the world s investable capital managed by women by 2030 set by Girls Who Invest. of single-manager funds monitored by HFR are run by women. missing one or two of the qualifications so I won t apply. Whereas a guy has only one or two of those skills and says oh I m qualified. So there needs to be a willingness to try things. Buchan does not deny the tough nature of the job though. Having to run capital and having that P&L responsibility for investments, it is brutal, she continues. You can tell whatever story you want to tell, you can talk about teamwork, but at the end of the day your numbers are your numbers. There is much more willingness by aggressive males to fall flat on their face and then say oh well, I ll go pickup something else. A chief financial officer at a US hedge fund told Global Custodian that for many women already operating in the industry, they feel it is important to make an impression once they are in a senior role. She provided one anecdote of when she attended a conference in New York 20 years ago when she described the industry as being completely male dominated. It was hard to blend in, so I wanted to stand out, said the CFO who preferred not to be named. I made sure I went in a red, purple or blue suit when I attended, making sure they knew there was a woman in the room. Nothing too over the top, just enough to stand out. It s about dispelling the myths of subjects like maths, economics and technology, and the seemingly brutal and aggressive characteristics of trading and hedge fund operations as being roles solely suited to men. When Global Custodian decided to write this feature, there just happened to be three of us all men sitting round the table involved in the discussion. One of the team asked is this the right thing to write, coming from three guys?. The answer is quite simply, that the responsibility lies with both men and women. Much like the way UN Women appealed for more input from men in the gender equality discussion with its HeForShe campaign, 100WHF, Landry and Buchan all recognise the importance of men being involved in these kind of discussions. Some of the biggest and best supporters are powerful men who now have daughters, says Buchan. That is a game changer. Their daughters are growing up in an environment where people are having overt conversations about gender differences and it is not considered so taboo. That s the kind of thing that is really causing people to change. There aren t enough women in senior level places to effect change overall. As guys are seeing their daughters grow up they want to see them have the same opportunities they have. n In association with: globalcustodian.com 21