The Association of Professional Fund Investors (APFI) believes in the business benefits of promoting diversity and looks at how to unleash its true potential.
We live in a complex and interconnected world where diversity, moulded by globalisation and technologies, forms the fabric of modern societies.
Investment firms, policymakers, regulators and industry body associations have been in recent years trying to create a more inclusive work environment while embracing the idea of diversity as a means of forging a sustainable future.
Diversity in the fund selection team means a broader network on which to rely for reference checks. It is also key for innovation," says Cedarmas
But, while most organisations claim to desire greater diversity and inclusiveness in their teams, a lot remains to be done to facilitate this objective.
The Association of Professional Fund Investors (APFI) is one of the financial industry bodies looking at how to promote diversity in all its strands by contributing to spread the message through its growing professional network of fund investors.
APFI firmly believes in the business benefits of promoting diversity and inclusion. The association supports the idea that teams made up of a diverse mix of employees might lead to greater innovation, growth and even outperformances.
It was co-founded in 2011 during a fund buyer event in Berlin by Mussie Kidane - head of fund selection at Pictet -, Carlos Fernández of Inversis, Luca De Biasi of BSI, and Roland Meerdter of Propinquity Advisors (at the time of foundation). It is an all-volunteer, non-profit professional organisation whose members are all professional fund investors from all over the world.
At its first general assembly meeting in May 2012, APFI was presented as "an association created by the fund selection community, for the fund selection community". The idea was, and still is, to put fund selectors' issues and concerns in a broader forum and create a worldwide network of fund selection professionals. In the process, the association could also serve new fund selectors to benefit from engaging with their more experienced peers.
The association has a leadership team made up of nine members of diverse background, nationality, age, gender, education or ethnicity.
Both Riccardo Campanini, fund of funds manager at Olympia Wealth Management, and Manuela Cedarmas,senior portfolio manager and head of Emerging Strategies and Markets at Tages Capital, are part of this team standing respectively as lead and deputy lead for the association in Italy.
As such, they are responsible for promoting APFI's goals in the country, which currently focuses on widening its membership list "in order to become a credible and effective voice for the fund industry" while looking at how to unleash the true potential of diversity in the fund industry.
APFI's efforts to promote diversity took form recently in the support the association gave to the Women In Investment Awards Italy 2019. These industry Awards were hosted by this publication on 2 of October in Milan seeking to recognise some of the achievements made by women working in the Italian asset management industry.
According to Italy's deputy lead at APFI Manuela Cedarmas, gender diversity is the most immediate form of diversity to address. However, she believes that the ESG focus by institutional investors and professional organisations spans across all forms of diversity including disabilities and ethnic diversity.
FIGURES TELL THE STORY
The World Economic Forum (WEF) published in its 2018 Global Gender Gap Report that global gender parity was over 200 years away and that no country in the world had achieved gender equality.
When looking specifically at the financial sector, gender parity's figures are even more astonishing. According to the WEF, only one in four board members and 6% of financial services firms' chief executives are women.
Culture seems to be a key factor behind this gap (old boys club, "motherhood penalty" or opaque bonus criteria, among others) while unconscious biases are probably at play too.
APFI's deputy lead for Italy Manuela Cedarmas says: "In the corporate world, we are beginning to see more female board members, but in many industries, top management is male dominated. This is very much obvious in the financial services industry, including asset management. A dialogue and good debate could help identifying the reasons, which are not so obvious and most of the time culturally driven, therefore difficult to eradicate."
Riccardo Campanini, APFI's Italy lead, thinks things are changing but still at a low pace. "My impression is that nowadays female professionals are slowly but steadily climbing the corporate ladder."
However he fears that smaller investment boutiques in Italy might be those lagging behind with regards to the issue, especially when comparing them to bigger asset management groups.
Campanini outlines: "I think the biggest firms in Italy are aware of the diversity issue and include it among their management goals, so it seems to be more a matter of time for them.
"I am not sure whether this is also the case in smaller organisations, so we should increase debate and awareness in this sector.
"APFI genuinely believes in the importance of having women in senior roles. A prove of that is our leadership team composition. Half of its members are high profile female professionals."
Cedarmas says that involving more actors in the debate and process is key to tackle the issue.
"In the last few years, there has been a very important acceleration in the promotion and integration of ESG factors both at corporate and investment level.
"It is key to further improve better practices and involve more actors in this process. Asset owners and organisations can help a lot in pushing for a real and lasting change," she said.
DIVERSITY AND PERFORMANCE
Does diversity bring better decision-making and outcomes? Cedarmas believes so. She claims that diversity in a fund selection team leads to a wider and more global universe of funds to analyse as sources given that sources are also likely to be more diverse.
She adds: "Diversity means a more challenging approval process as any idea would be subject to a broader analysis.
"Diversity in the fund selection team also means a broader network on which to rely for reference checks. It is also key for innovation and unconventional thinking while means better risk management as this would be covered from different angles."
Campanini adds: "I think the key issue here is to consider merit the overriding criteria to make both recruitment and career decisions; there is no reason to discriminate anyone as long as employees and managers effectively carry on the organisations' goals.
"The latter should also note that gender diversity in the teams helps reduce the competitive drive which is often present in our industry."
With regards to cultural and ethnicity diversity Cedarmas believes they are also likely to contribute towards better insights, analysis, debate, decision making and awareness of alternative approaches to solving problems and addressing challenges. She follows: "In a global world, we live with different cultures, religions and traditions around us and isolationism will be an obstacle to success.
"Generational diversity is another form of diversity we should be aware of. The younger generations sometimes express different values and preferences compared to the older generations. It is important to bring these views together. In an organisation, this would mean a real opportunity for both the junior members and working groups to voice their opinions."
Cedarmas recognises that at earlier stages of her career, she suffered somehow that generational barrier. "I believe that, early on, in a few occasions, I perceived more barriers due to my young age. I believe that in southern European countries the generational element is a largely dominant factor in valuing a professional, while in the Anglo-Saxon world it is considered as one of the aspects, alongside merit and overall contribution to the team."
Nevertheless, she proudly talks about her first mentor, Alberto Giovannini, an Italian macroeconomist and financial economist whose contributions to monetary policy andfinancial markets infrastructure in the European Union were particularly relevant. In Cedarmas' own words, Giovannini had an unconfined trust in the ability of young colleagues to challenge his views and was always keen to discuss and teach the financial and ethical principles of the job. "He was a mentor in the most comprehensive meaning of the word," she concludes.