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More than half of women in alternative investments plan to launch a new fund in next 18 months - survey

Wednesday, December 07, 2011
Opalesque Industry Update – New Research from Rothstein Kass / 85 Broads provides investment and operational insights, examines impact of gender on core business functions

Rothstein Kass (www.rkco.com), a leading professional services provider to the financial services industry and the global women’s network 85 Broads (www.85Broads.com), announced the release of “Women in Alternative Investments – Industry Outlook and Trends,” a new report focused on trends impacting core business functions at alternative investment firms. The research features the investment and operational insights gained through a third quarter survey of 189 executive-level women investing capital through hedge funds, private equity funds or venture capital funds. The report highlights the industry, capital-raising and investment insights of women fund managers and explores whether gender impacts core business functions such as capital-raising.

Findings indicate that while nearly 70 percent of respondents anticipate that the next 18 months will be challenging for the industry, they are more optimistic about investment outlook and new fund launches within that same period. Nearly 65 percent of respondents are confident that there will be attractive investment opportunities, and slightly more than half of respondents indicated that they plan to launch a new investment fund within the next 18 months.

“Over the past decade, there has been a significant increase in the number of successful women in the alternative investment community. Women have attained leadership roles in every niche and have added to the rich diversity of the hedge fund, private equity and venture capital sectors, to the benefit of investors and partners. These women are having a major impact on the direction of the industry,” said Kelly Easterling, a Principal in the Financial Services Practice at Rothstein Kass and Principal-in-Charge of the Firm’s Walnut Creek office.

Most survey respondents believe it is more difficult for women-run funds to attract capital. Slightly more than 40 percent of respondents believe capital-raising is more difficult for women-run funds because women often lack the investment track record their male peers have. About a third of respondents believe that women’s capital-raising efforts are hindered by the stereotype that women are more committed to family and personal responsibilities than their career. Slightly over 30 percent believe it is harder for women to raise capital because they have less access to investor networks.

Other notable findings include:

  • Nearly 70 percent of the women surveyed expect the next 18 months to be more difficult than the preceding period. In spite of this, slightly over 60 percent of survey respondents anticipate an increase in new fund launches over the same period.
  • Although most respondents believe fund launches will increase in the next 18 months, respondents were divided as to whether more women would participate in these launches. Yet more than half of our survey respondents are planning to introduce a new fund themselves in the next 18 months.
  • Over 70 percent of respondents plan to raise capital in the next 18 months.
  • Family offices (52 percent), pension funds (52 percent), high-net worth individuals (50 percent), foundations (41 percent) and endowments (35 percent) are seen as most likely sources of new capital. Sovereign wealth funds (25 percent) and “other foreign sources of capital” (18 percent) were also viewed as significant sources of capital.
  • In an uncertain economic climate, over 65 percent of participants are confident that there will be attractive investment opportunities in the next 18 months.
  • A majority of respondents expect terms for new capital to be less favorable to fund managers in the next 18 months.
  • To help facilitate women’s advancement in the industry, respondents noted that women need greater access to roles which enable them to establish an investment track record, more women need to be recruited into the industry, and institutional investors should consider women’s representation in investment roles when making allocations.

The report also identifies the factors most critical to respondents’ success in the industry. The most important factors were having a strong professional network, having strong mentoring relationships, willingness to take risks, strategic career planning, and strong support networks.

“One of the goals of 85 Broads is to use our platform to match great ideas with great talent,” explained Janet Hanson, Founder and CEO of 85 Broads. “In recent years, we’ve seen greater numbers of senior-level women strategically investing significant capital in start-up companies and funds led by women. Senior women are making these investments, in ventures often led by young women, not out of an obligation to give back or for charitable purposes, but because they are investing in real talent. I think this trend will continue, and that we’ll see more women with capital investing in funds directly. This is an encouraging development for the industry as a whole.”

“Women in Alternative Investments – Industry Outlook and Trends,” draws on the collective wisdom and expertise of the professionals of Rothstein Kass, 85 Broads, and an advisory board comprised of women leaders in the alternative investment industry to provide context for statistical findings. The Association of Women in Alternative Investing, the Women’s Association of Venture and Equity, The Women’s Private Equity Summit and the Women’s Alternative Investment Summit also contributed to the report. Where applicable, results are contrasted against the results of earlier Rothstein Kass research initiatives focused on the hedge fund and private equity communities.

(press release)

Rothstein Kass is a premier professional services firm that has served privately held and publicly traded companies, as well as high-net-worth individuals and families, for more than 50 years. As trusted advisors to our clients, Rothstein Kass provides accounting, auditing and tax services, as well as a full array of integrated services, to clients across industry spectrums and in all stages of organizational development. At the core of Rothstein Kass’ remarkable success lies our commitment to hiring, developing and retaining employees that represent an entrepreneurial spirit mirroring that of the sophisticated business and financial services communities that we serve.

Founded in 1997, 85 Broads is a global women’s network whose mission is to generate exceptional professional and social value for its members. Through 85 Broads’ regional events and online at 85Broads.com, members invest their time, their intellect, and their financial capital in each other’s ideas and businesses.

The women in 85 Broads are entrepreneurs, investment bankers, consultants, filmmakers, lawyers, educators, athletes, venture capitalists, portfolio managers, political leaders, philanthropists, doctors, engineers, artists, scientists, in addition to women who are seeking to blaze new trails.

BG

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