Philip Kalus (pictured), managing partner at accelerando associates argues that the asset management industry should strive to improve diversity within its ranks in order to boost both, reputation and performance.
The asset management industry prides itself with being a modern, open and talent driven workspace. Looking at a number of top posts taken by female leaders and generally gender and race diversified marketing campaigns one may well conclude that asset management provides real diversity. However, reality is (yet) different, which hinders creativity, innovation and best possible results.
Anne Richards (Aberdeen Asset Management), Elizabeth Corley (Allianz Global Investors) or Helena Morrissey (Newton) hold undisputed top jobs and serve well as prime examples of female leadership in asset management, but only 4% of UK asset management executive director roles are taken by women according to a recent KPMG study. In Germany only 8% of fund managers are female. Gender diversity looks different.
On the other side of the table, on the selector side, we find a similar gender ratio. However, there are also a number of important fund selection units led by women like Manuela Thies (Allianz Global Investors), Belén Blanco (BBVA Quality Funds), Sylvia Bocchiotti (LCL Banque Privée) or Alexandra Haggard (Stamford Associates).
Many case studies and academic research provide evidence for the positive impact of diversity – in particular for client and communication centric industries like asset management. A study from the Gallup Business Journal in 2014 concludes that the benefit comes from the idea that men and women share similar yet creatively different viewpoints and ideas. The diversity of opinions often leads to a wider array of market insights and better problem solving.
Lisa Backes, Managing Director and CIO at YCAP Asset Management (Europe) says “our team features more women than men. We did not target any gender ratio, but to build the best possible team for us and hence for our clients. Women are not better than men, but women are different and this has very positive impact on our firm, our results and investor relationships“.
Speaking at a Fund Management Summit last year Helena Morrissey said “more women create cognitive diversity and biological differences in behaviour. Female fund managers usually outperform in a market downturn as their behaviour is less governed by testosterone.” A 2013 study from Thomson Reuters has summarized that companies with gender diverse boards maintained lower records of tracking errors, as well as lower volatility risk. In similar results, McKinsey concluded that diverse management teams created higher returns for shareholders in most industries.
What may be the way forward to reach a more balanced gender ratio? A female quota for board rooms, like it is heavily discussed in Germany, doesn’t cover the ground adequately. “Gender diversity must be already addressed a number of floors below the board room in order to reach a sufficiently large pool of female leaders“ say Lisa Backes. Diversity must be targeted at junior levels already.
Another rather alarming aspect is wide-spread sexism in our industry. A respective survey performed by the Financial Times in late 2014 has come out with shocking results. The newspaper has quoted Martin Gilbert, CEO of Aberdeen Asset Management with “unfortunately, I am not surprised this behavior still goes on, but I am shocked the figures remain so high. It is a huge concern. From a moral perspective it should not be happening, but it also makes no business sense. Research clearly shows that more diverse teams perform better. This kind of behaviour will discourage women from joining the sector, which is bad for the industry and investors.”
The asset management industry must make a move forward now by actively promoting diversity in the interest of its fund investors, shareholders, but also in its very own interest. Diversity will lead to positive change and hence to better reputation and improved public image.