Fewer than one in ten of the funds in the Investment Association’s vast funds database are managed or co-managed by a woman, resulting in a “gross gender imbalance” across the industry, according to UK investment group Tilney Bestinvest.
In its fourth annual analysis of the UK and global retail investment funds universe that are managed out of the UK, Tilney Bestinvest has found that only around 8.5% of fund managers or co-managers are women.
Although this figure is higher than the 7% it identified last year, Jason Hollands, managing director of communications at Tilney Bestinvest, said the lack of women in the UK asset management sector nevertheless still represented a “gross gender imbalance”.
In a statement accompanying its latest analysis, Hollands said that the asset management industry needs to “show it is serious” about understanding this problem and addressing it, by speaking “with greater authority” when engaging with company boards on matters of diversity.
“Our analysis once again demonstrates that despite a handful of high-profile women in senior management positions within the industry, front-line fund management positions are usually held by men,” he said.
‘Gross gender imbalance’
“Gross gender imbalance in the asset management industry is an irrefutable fact, but the unanswered question is, why this is the case when women represent a large ratio of university graduates, and improved diversity is evident in many other professions?”
Hollands pointed out that, for example, almost half of GPs are women, one in four partners at law firms are now women, and women now account for 26% of the seats on the boards of FTSE 100 companies.
“Fund management is first and foremost a human capital industry, reliant on finding very bright and analytical people to look after other people’s wealth,” added Hollands.
“It’s clearly not healthy for the long term success of the industry to have such an extreme imbalance like this, because it suggests it is not effectively drawing upon the widest pool of talent.”
“There won’t be a quick fix, but firms need to consider how they recruit at the graduate entry level, particularly in areas like research which is often the key stepping stone into portfolio management,” he said.
As for the apparent 1.5% percentage point increase in the number of women reported to be managing UK funds in this year’s research (to 8.5%) compared with last year’s 7%, it is more likely to be due to the fact that the survey now covers all investment sectors, whereas the previous ones were based on the five largest Investment Association sectors, than on any significant actual increase in numbers, Tilney Bestinvest said.
Looking just at these five main sectors – UK Equity Income, Mixed Investment, Corporate Bond, UK All Companies, and Global – on a like-for-like basis, the proportion of women rose, but only to 7.8%, the data showed.
The types of funds found most likely to be managed or co-managed by women, meanwhile, tended to be in certain smaller and more specialist sectors, including China, Tech & Telecom and Japanese equities, the Tilney Bestinvest research revealed.