GC IN-DEPTH | WOMEN IN FUNDS

Tipping the scales There are plenty of statistics highlighting the underrepresentation of women in senior roles at hedge funds, but now the industry is taking a more proactive than reactive approach to conquer inequality, writes Jonathan Watkins.

his is where a statistic would usually be, highlighting the What became abundantly clear was imbalance between women and men in senior hedge that while they didn’t mind discussing Tfund positions. Right here would be another figure about the matter, just talking about the current how well that smaller percentage perform in their respective inequality and firing out statistics – such roles, and finally the question ‘so why aren’t more women as only 3% of hedge funds monitored by running hedge funds?’ would be presented. index provider HFR are run by women When reaching out to some of the most successful women – were not going to trigger the desired in the business, I asked them if they were tired change. Those numbers certainly amplify of talking about the underrepresentation of women in hedge the need for change but they do not funds, gauging whether this was a topic covered perhaps directly ring it. too often. This is not to say that raising

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awareness of the disparity between men and women in senior “Change has been coming more slowly than personally I roles should be scaled back, but the real story is around what would like to see. There are changes every day though, from is being done to provide opportunities and encourage women 100 Women in Hedge Funds, to seeing other women rise to the in the industry. top in other areas like operations.” This applies to everyone, from young women who may not have even started working yet, to those already in the early to One vision mid stages of their career who are looking to the future. That change Landry was referring to has certainly been aided From changing the mindsets for young girls snubbing by the organisation 100 Women in Hedge Funds (100WHF). traditionally ‘male’ subjects at school, to women in roles at While the shift in seeing more women in senior roles in hedge hedge funds having the ability to reach the very top. funds may have been slower than some would hope for, “It’s on the women who have already made it,” says Monica 100WHF stands as proof that there are in fact a lot of women Landry, head of trading and operations at Farallon Capital running funds around the world. Today, the group boasts more Management. “Even though you’ve got there and think ‘this than 13,000 members in 20 locations across three continents. is great’, you have to take on the additional responsibility to This consists of representatives from over 2,800 hedge funds, make sure the path is easier for the women behind you to 1,000 fund-of-funds and 500 institutional buyers. get there.” We’re going to keep going with these statistics as they are impressive and paint a positive picture of where the industry has progressed to at this point. In its 14-year existence, “You have to take on the additional 100WHF has held over 400 educational events, and raised over responsibility to make sure the path is easier $36 million for charity. The organisation has also secured royal backing, announcing for the women behind you to get there.” in November 2015 that The Countess of Wessex will serve as Global Ambassador of 100WHF’s Next Generation initiatives. This came shortly after The Duchess of Cambridge also Landry has risen through the ranks at Farallon over her 20- attended their London Gala in October. year career. What began when answering a newspaper advert “It’s not about ‘why aren’t there so many’ it is about what in 1994 to take on a temp role, laid the foundations for a we can do as an organisation to have impact on the next highly successful career at the San Francisco-based hedge fund. generation of women, and what can we do to increase the By the time Landry had made the move onto the trading number of women looking at the finance industry,” says desk, the team comprised of 13 employees, with just two Amanda Pullinger, chief executive officer of 100WHF. women. Her 16-strong team now consists of seven women. “It is quite clear that there are not enough women in the Four of which, Landry has helped move up from working on industry, and we can all talk about what the reasons are, but the front desk to their current roles. what we like to do is take action.” “I do think in general women are still underrepresented This approach has made 100WHF a lifetime partner for in the hedge fund world, but I don’t think it’s unique to the aspiring women. The organisation reaches out to schools and hedge fund industry, women are underrepresented in a lot of universities to help them acknowledge the opportunities that are areas in this world,” she explains. out there for them, while also providing positive role models in “Part of it is around education so everyone knows what the form of women already operating in the industry. opportunities are out there. Mentorship and having role models Members of 100WHF are encouraged to bring their daughters is so important. If we can get senior women out there to and nieces to education events, while the organisation also educate people we are going to get more traction and more arranges dinners as an open forum for young girls to ask young girls having an interest in the area and have a belief that women in the industry any questions they may have. they can do it.” “What that provides for these young women is opportunities From the women Landry has steered to their roles within to see women sitting on a panel, who work in investment roles her trading and operations team, to her young niece who and other positions in the industry on the stage, talking about she spent time discussing the benefits of studying topics topics related to their job,” adds Pullinger. like mathematics to, Farallon’s operations head has placed “That 10 year old girl isn’t going to come into the industry a significant amount of importance on educating and next year, but we have to start young, letting young women encouraging her juniors. know that this is a career for a woman and these are the She says it is on the leaders of the industry to influence exciting aspects of it and these are the things you get to think change, referring to both men and women in senior positions. about every day and act on.”

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“If we can get senior women out there to educate people we are going to get more traction.” Monica Landry, head of trading and operations, Farallon Capital Management

Tough conversations The group’s next generation initiative then provides a resource Rising through the ranks for women who have been in the industry for less than eight onica Landry stepped into the offices of Farallon years, giving them a forum in which to ask questions and seek MCapital Management in January 1994 after responding support. This part of the group focuses largely on retaining to an ad in a newspaper, and remains there to this day. those women in the sector. While her role has changed substantially from what she For the more senior members of the group, many of them described as initially being a ‘Jack-of-all-trades’, one thing then take on the role of educating and mentoring others. So she has held onto has been the same chair for her 20-year from the very early stages of their careers right to the end, tenure, she tells Global Custodian. That chair has come a 100WHF has become a resource and companion for women in long way since January 1994. hedge funds. Landry began as a temp at the hedge fund, when it had “I think this is going to be a very powerful tool in around 10 employees. “I started with everything, moving retaining women in the industry. People can be open about from accounts payable, accounts receivable, taught basic conversations such as ‘I’m thinking of having a family, how will accounting and general ledger, I started closing the books that work with my career, how did you do it? Will someone be and doing capital allocations,” she explains. “After a couple there to support me?’ of years of raising my hand for everything, they needed “Those conversations are hard to have in a work-based some assistance on the trading desk and asked me to switch environment but easier in a forum and environment that is directions and move onto the trading desk.” run by 100WHF. It is about being in a culture where you are a In 2001, Landry became a partner at the firm and co- minority and how you manage and work with that.” managed the trading desk until 2003 when she took over The topic of having a family is one on the minds of many the reign solely. Much like her own journey, Landry has women both entering the industry and already working in it. looked to promote and develop junior office employees As Pullinger describes, it is an example of one of the more from within the company and four of her 16-strong trading common conversations with their next generation iniative. team actually worked on the front desk at one point in their For one chief financial officer, who preferred not to be career. When Landry joined Farallon the trading desk had named, the perfect work/life balance is almost impossible to 13 employees with 1 female partner, and another at another achieve while working in a hedge fund, though she equates site. Landry’s team now consists of 16, with seven women this to any high-pressured job. on her team in trading and operations. “Some days I’m a bad CFO and a good mother, other days I’m great at my job and not an amazing mother,” she says. “It’s not been easy and you can’t get it right every day.” “As a woman there is a lot of pressure society places on you as a parent, though men aren’t exempt from that either.” She adds that in her situation, even picking the children up from school once in a while brought questions from teachers

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“If there’s one piece of advice I could scream through this article it is to get on the right path.” Jane Buchan, CEO, PAAMCO

about ‘why she was there’. Ultimately though, she believes it’s a decision which has to be made if you want to succeed in a The accidental entrepreneur job such as a hedge fund CFO. “I’ve asked my kids a lot as they grew up if it is okay that I escribing herself an ‘accidental entrepreneur’ to Global work,” she adds, saying her children supported her decision. DCustodian, we wished we could all be so lucky to have “They helped me make the choice.” such a moment of accidental entrepreneurship. Of course, The importance of organisations and initiatives where there was much more than chance behind Jane Buchan’s women have somewhere to ask these questions is crucial move to start up her own company, which now takes the as it’s something that will no doubt go through many minds form of a $9 billion global fund-of-hedge funds manager. throughout the course of their career. Buchan began her career at J.P. Morgan Investment In its 14-year history, 100WHF has been supported by some Management in the Capital Markets Group before becoming major names in the hedge fund industry, perhaps none bigger an assistant professor of finance at the Amos Tuck School of than Jane Buchan, CEO of $9 billion global fund of hedge Business at Dartmouth. During that time she also operated funds manager, PAAMCO. To commemorate her work, the as a consultant, evaluating technical strategies and hedge group recognised Buchan as a Charter Angel for her support. fund strategies. With some initial backing, Buchan set up When it comes to inspiring young women in hedge funds, PAAMCO at the start of the millennium in California and in few have done this as well as Buchan. Along with her 15 years has seen it expand to London and , while contributions to 100WHF she also been an integral part of growing its exponentially. setting up the initiative Girls Who invest (GHI). PAAMCO has earned more accolades than we can fit in this article, while Buchan herself has become a leading No limits voice in the industry. She supported the formation and The idea behind GHI is to give university graduates the best funding of the 100 Women in Hedge Funds Association possible shot at not only becoming involved in hedge funds, and Foundation (100WHF), and has been honoured by the but ultimately running them in the future. group as a 100 WHF Charter Angel to recognise her support. The group’s benchmark for success is to have 30% of the In partnership with 100WHF Buchan has been involved in world’s investable capital managed by women by 2030. a scholarship initiative which aims to provide qualified and Buchan believes that in order to have the best chance of talented women in the alternatives industry access to the achieving this, women need to start on the right path from the well-reputed CAIA Charter. Together they have given out first job out of university. Subsequently, GHI targets women 50 scholarships since 2011. Buchan is also on the board of in their sophomore and junior year and runs a four-week directors for Girls who invest, a group aiming to get 30% of investment course, followed by placing them in internships in the world’s investable capital managed by women by 2030. portfolio management. “When people leave university if there’s one piece of advice I could scream through this article it is to get on the right path and make sure you start in the right place,” says Buchan.

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“We have to start young, letting young women know that this is a career for a woman.” Amanda Pullinger, CEO, 100 Women in Hedge Funds

“It is very hard to not come up from the portfolio side and run a hedge fund. Organisations are so small, it is so much about Leading the charge eating what you kill in terms of the investment return and the manda Pullinger has been one of the driving forces P+L that if you aren’t actively involved in creating that P&L from Abehind the success of 100 Women in Hedge Funds, an investment viewpoint it is very hard to run a hedge fund.” resulting in her ascendance to the CEO role in January 2014. Much like some of the 100WHF events and ideas, and At 100WHF she leads a small staff team and manages echoing Landry’s sentiment of it being on the leaders of the over 350 volunteer practitioners globally, overseeing the industry, Buchan believes it is down to those already involved operations of the organisation, which now has over 13,000 in hedge funds to educate young women and make them members. aware of the avenues open to them. Pullinger was one of the founding board members of “One of the big things that can be done is for women 100WHF, before then becoming president and executive involved, whether it is their own children or their friends’ director in the years to follow. She is also chairman of children is to push them – for those interested in hedge funds the board of The HALO Trust – a British organisation – and ask why wouldn’t you take a portfolio management role? specialising in the removal of the debris of war – and serves Or an analyst role? Or a research role?” says Buchan. on the Advisory Board of the Oxford Alumni Association “Because there aren’t a lot of women who start in portfolio of NY. management it becomes really problematic. You need all She previously served on the Boards of SkillForce, NYU different types of people to run a business.” Cancer Institute and Girls’ Prep and is a member of the Again, the running theme here is inspiring young girls and British Academy of Film and Television Arts (BAFTA) and a letting them know that the opportunities are out there for Fellow of the Royal Society of Arts. them if they wish to take it. It’s about dispelling the myths Pullinger is a former principal of Aquamarine Capital of subjects like maths, economics and technology, and the Management, where she was responsible, over a period of seemingly brutal and aggressive characteristics of trading and seven years, for managing marketing, investor relations and hedge fund operations as being roles solely suited to men. back office administration for two private investment funds. Pullinger graduated from Brasenose College, Oxford Game changer University in 1987 with an Honours Degree in Modern Here’s one of the issues, at the end of the day women will be History. She earned an MBA from La Salle University, up against men in an industry which is dominated from top Philadelphia, in 1998, and received the Academic Award for to bottom by males. It is therefore fixed in their mindset that MBA student of the year as well as the Gamma Sigma they are up against it from the outset. This is where starting designation. to alter the attitudes at an early stage could end up leading to achieving that 30% by 2030 target. “A job description goes out for a high level job,” explains Buchan, “and obviously women are all very different, but in a lot of cases women will read the applications and say, ‘I’m

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Numbers don’t lie 6.25% five-year returns of hedge funds owned or managed by women as of June 2015, compared to HFRI Fund Weighted Composite Index and HRFX Global Hedge Fund Index, which gained 5.13% and 1.54%, respectively over the same period. 59% total returned by women-led hedge funds since January 2007, against an industry average of 36%. 79% of respondents to a KPMG survey said they believe it is more difficult for women to succeed in the hedge fund industry. 30% the desired benchmark of the world’s investable capital managed by women by 2030 set by Girls Who Invest. 3% of single-manager funds monitored by HFR are run by women. Sources: HFR, KPMG

missing one or two of the qualifications so I won’t apply’. When Global Custodian decided to write this feature, there Whereas a guy has only one or two of those skills and says ‘oh just happened to be three of us – all men – sitting round the I’m qualified’. So there needs to be a willingness to try things.” table involved in the discussion. One of the team asked ‘is this Buchan does not deny the tough nature of the job though. the right thing to write, coming from three guys?’. The answer “Having to run capital and is quite simply, that the responsibility having that P&L responsibility lies with both men and women. for investments, it is brutal,” she “It’s about dispelling the myths of Much like the way UN Women continues. “You can tell whatever appealed for more input from men in story you want to tell, you can talk subjects like maths, economics the gender equality discussion with about teamwork, but at the end and technology, and the its HeForShe campaign, 100WHF, of the day your numbers are your Landry and Buchan all recognise the numbers. seemingly brutal and aggressive importance of men being involved in “There is much more willingness characteristics of trading and these kind of discussions. by aggressive males to fall flat on “Some of the biggest and best their face and then say ‘oh well, I’ll hedge fund operations as being supporters are powerful men go pickup something else’.” roles solely suited to men.” who now have daughters,” says A chief financial officer at a US Buchan. “That is a game changer. hedge fund told Global Custodian Their daughters are growing up in that for many women already an environment where people are operating in the industry, they feel it is important to make an having overt conversations about gender differences and it is impression once they are in a senior role. not considered so taboo. She provided one anecdote of when she attended a “That’s the kind of thing that is really causing people to conference in New York 20 years ago when she described the change. There aren’t enough women in senior level places to industry as being “completely male dominated”. effect change overall. As guys are seeing their daughters grow up “It was hard to blend in, so I wanted to stand out,” said the they want to see them have the same opportunities they have.” n CFO who preferred not to be named. – In association with: “I made sure I went in a red, purple or blue suit when I attended, making sure they knew there was a woman in the room. Nothing too over the top, just enough to stand out.”

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