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While more people are willing to talk about the need to have more women in portfolio management positions and/or allocating to a woman-owned hedge fund, many that we interviewed feel that little progress has been made over the years.

While it is difficult to know the exact percentage of females in investment positions or ownership roles at hedge funds, various estimates range between 1% and 7%.

Amanda Pullinger, chief executive officer of 100 Women in Finance, says it is hard to know exactly what percentage of hedge fund investment roles (i.e. chief investment officers, portfolio managers) are held by women or what percentage of hedge fund industry assets are managed by women. "Anecdotally and broadly speaking for the investment world, we believe the percentage is about 10% and it is unlikely that that percentage has changed much in the past 20 years. For hedge funds, that percentage probably dips closer to about 7% and in private equity or real estate, it's even lower. We see a higher percentage of women in long-only and mutual funds."

Looking ahead, 100 Women in Finance plans to create a baseline number this year in support of its Vision 30/40 initiatives. Vision 30/40 challenges both 100WF and the industry to see women hold 30% of executive and investment leadership roles by 2040.

The main obstacles for women include lack of relationships and mentors in the industry, difficulty raising assets, allocators' unconscious biases, and risk aversion characteristics associated with women.

Jane Buchan, a co-founder of Pacific Alternative Asset Management Company (PAAMCO) and Martlet Asset Management, a hedge fund, says allocators seem more secure selecting managers who fit "the hedge fund mold" and are more like those they have allocated to in the past i.e. white males who've gone to the top universities and colleges and who've held previous positions at prestigious firms or funds. The COVID-19 pandemic provided another setback to women launching start-up funds as asset raising became more challenging.

One manager who recently shut down said, "It's like a chicken-and-egg situation. Many of the women-owned firms starting are small. They need between $200 million and $300 million to get to a threshold level.

Institutional investors, who are passionate about adding female and minority managers, need to allocate to larger managers. Most of the institutional money is going to larger firms… Minority-owned firms are attracting more of the institutional capital - women less so."

Over the years, several large established funds of funds have been managed by females. Sources say one can't assume successfully managing a fund of funds will translate into successfully managing a hedge fund. Major differences exist.

Considerably more performance dispersion exists with a hedge fund than a fund of fund which makes managing a hedge fund more difficult. Buchan says, "More performance dispersion exists with a hedge fund which makes it more difficult. In the fund of funds space, the difference between a good and a bad fund of funds is about 100 basis points but for a hedge fund, the disparity could be 10%."

And different skill sets are needed. "You find more women in fund of funds research and due diligence positions," says Amy Hirsch, chief executive officer of Paradigm Consulting Services. "Men are great at focused analysis but tend to be less effective with multiple tasks. In due diligence analysis, I find that women have an edge when it comes to multi-tasking, viewing multiple dimensions, and reading people which is critical in due diligence."

Overall, progress is being made but it is slow. While the quality of young women investing today is reported to be high and the numbers are higher than in previous years, several women-owned hedge funds have recently shut down despite raising hundreds of millions of dollars. For now, these women are either taking the family office route or joining a larger organization where they don't have to worry about capital raising.

One sector where progress is occurring is Environmental, Social and Governance (ESG) funds. "Investing with a purpose inspires women and many women are launching ESG funds," says Pullinger.
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