There are fewer than 200 women fund managers in the UK but 60 more will receive training each year. Can this change the industry?
(Bloomberg) — There are currently around 200 female money managers in the UK but if 60 more are trained each year, the number of women running funds in the country could almost double by 2026. That’s far more progress than has been made in the last five years — and also happens to be the pitch of investing veteran Helena Morrissey, who’s taking things into her own hands via the Pathway Programme.
The project, launched in January in London’s Canary Wharf, kicked off with a class of 60 women, most of whom already work in investment-related roles. Over the next 12 months, participants will receive training on how to manage both their lives and investors’ money, as well as opportunities to network with senior fund managers, something that can be difficult in a closed off industry.
Only 18% of the world’s funds are run by a woman or a team with at least one woman, according to according to Citywire’s Alpha Female Report published in 2022, which tracks just over 17,500 active managers — and the share of women money managers has stagnated at around one in ten in recent years in top financial hotspots. In the UK, 193 women fund managers make up around 12% of the sector’s workers. This is despite growing evidence that mixed teams make better decisions and, crucially, more money. An influential 2015 McKinsey study found that for every 10% increase in gender diversity among top executives at British companies, earnings are boosted by 3.5%.
“Obviously we’ve had business cases going back decades now,” Helena Morrisey, chair of the Diversity Project and a member of the House of Lords, said in a Bloomberg Radio interview. “We now have to make a personal case and say: ‘Your team will be better, your business will be better, you’ll have more connection with your clients.’ I actually want to win over hearts and minds.”
Welcome to the Club
Pathway mentees, selected internally by 33 participating companies will learn technical investing skills meant to complement the CFA qualification, as well as learning how to navigate everything from maternity leave and pay conversations to fashion and public speaking.
“There’s so many little tips and so many little nuances and things that you pick up over the years”, said Omotunde Lawal, head of emerging market corporate debt at Barings and Pathway mentor, speaking to Bloomberg Radio. Lawal hopes that sharing this knowledge with women at an early stage will help fast track parts of their careers.
For mentees like Ellen Mann, an equity analyst at Jupiter Asset Management, the promise of belonging to a tight-knit cohort was the main selling point. Mann spent the first two years of her career in lockdown working by herself and only had one friend in finance before Pathway. She wishes she had more role models in the industry.
“The thing that really appealed to me was just the opportunity to meet a lot of other women in the industry,” she said. “It is disappointing to see in general how few women there are in both analyst roles and as fund managers,” she said.
Undiscovered Gems
One broader question for Morrissey is why there are still so few women fund managers. While she says it’s “quite a mystery,” she also suggests that the huge majority of men in the profession sends a signal that the industry could be isolating.
Mann said part of the problem could be down to the targeting of recruits with STEM degrees, who are predominantly men, even for generalist fields. And Camilla Ayling, portfolio manager at Legal & General Investment Management and Pathway mentor, pointed out that career events at universities often make students feel like investment banking is the only game in town.
“It’s a case of changing mindsets, changing habits, changing deeply rooted beliefs and opening people’s eyes to possibility,” said Rosie McMellin, director of portfolio management at Fidelity International, in an interview with Bloomberg Radio.
A 2018 report from New Financial said there were wider issues; it diagnosed the industry with an overreliance on a single line manager for pay and promotion prospects, a culture of presenteeism and making maternity leave harshly taxing for portfolio managers’ track records. The point about leave is especially salient; women might be attracted to fund management thanks to its reputation as a performance-driven career spanning decades, expecting that a relatively short absence won’t set them back, said Ayling.
Yasmine Chinwala, partner at New Financial and study co-author, said companies need to look at wider criteria when hiring for portfolio management roles and also need to encourage mobility within firms. “Very few employees move across to investment roles if they didn’t join the firm in an investment role. They get pigeon holed and it is impossible to move across,” she said.
There’s also the practice of “like-for-like” hiring: if a global equities manager running a £5 billion fund for US investors leaves, they are then replaced by another global equities manager running a similar fund, according to Chinwala. “So unsurprisingly, the candidate pool is very narrow even amongst white male managers, let alone any other diversity characteristic,” she said.
Yet Morrissey thinks the Pathway program can inspire change at businesses — and then just as quickly self-destruct. Give it a decade, she said, and the project won’t be needed anymore.
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