A recent piece of research has given an interesting insight into what progress has been made towards achieving gender equality amongst fund managers in the UK.
Female Representation is Low, but Progress is Being Made
The analysis by investment group Tilney looked at the proportion of UK retail investment funds, such as OEICs and unit trusts, managed or co-managed by women. It found that the number of funds managed by female managers has risen to an estimated 9.2%, up from 8.5% last year.
Tilney highlights that, even with the increase over last year’s figure, the representation of women in front line fund management positions is still very low and lags the progress seen in many other fields, for example the legal profession, where one in five partners at law firms are now women.
However, it welcomes the signs of progress, pointing out that when this analysis was first carried out in 2013, just 5% of funds were estimated to be managed or co-managed by female fund managers.
Industry Failing to Draw on the Widest Talent Pool
“Fund management is first and foremost a human capital industry, reliant on finding very bright and analytical staff to look after other people’s wealth,” commented Jason Hollands, Managing Director at Tilney Group. “It's clearly not healthy for the long term success of the industry to have such an imbalance like this because it suggests it is not effectively drawing upon the widest pool of talent.”
“There isn’t a quick fix as ultimately there are a finite number of funds and incumbent managers can remain in situ for many years before passing on the baton to a successor,” he said. “But firms can make a difference when recruiting at the graduate entry level and especially in areas like research, which is often the key stepping stone into portfolio management.”
“Achieving improved gender diversity will also enable the fund management industry to speak with greater authority when engaging with company Boards on matters of diversity as many firms seek to do as active shareholders,” he added. “Here, there has been notable progress since the publication of the Davies Report in 2011, with women now accounting for 26% of Board positions at FTSE 100 companies, up from 12.5% in 2010.”
Obstacles to Female Progression
An influential report published last year by LeanIn.Org and McKinsey & Company highlighted some of the obstacles women can face in trying to reach the more senior positions in an organisation.
The Women in the Workplace 2016 study found that commitment from companies to gender diversity has never been higher, but that many organisations are struggling to translate this commitment into practical actions. As a result, promotion rates for women are much lower than for men, with 130 men being promoted to a management level position for every 100 women.
The study also found that women are just as likely as men to try and negotiate for a pay rise or a promotion, but when they do so they are 30% more likely to be told that their actions are ‘aggressive’, ‘intimidating’ or ‘bossy’.
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