A few years ago the first-ever Rothstein Kass WAI Hedge Fund
Index came out, with the report that women-run hedge funds had
outperformed all others for a period of six and a half years. The
index had returned 6%, compared to the S&P 500's 4.2% and
the HFRX Global Hedge Fund Index's -1.1%. The news was all good: short of any oversimplified
interpretations, it held the proof that women-run funds could
thrive in a male-dominated field, performing as well as, if not
better than, other funds.
That was 2013. What's happened since then? Has the Rothstein
Kass Index proven to be a watershed in the gender balance of
As we look ahead to the release of KPMG's 2016 Women in
Alternative Investments study, it may be a good time to
evaluate the current state of women in the alternative investment
Slow and steady
Since hard data only looks backward, it's not possible to
add "wins the race" to this title. However, in data
collected at the end of 2015, none of the survey respondents
foresaw a decrease in their allocations to women-owned or -managed
funds, and 26% expected to see an increase. Furthermore, there was
a slight drop in women who agreed that their gender made it harder
for them to succeed in the industry: 61%, down from 67% in 2013.
There was also a 5% increase in investors who had mandates to
invest in women-owned or -managed funds, albeit only up to 7%, from
2% in 2013.
It's hardly a quickness of change, but there seems to be a
cautious optimism that progress is being made. At the very least,
figures show that the trend that Rothstein Kass uncovered in 2013
was no anomaly. The HFRI Women Index, the premier global
performance index of funds owned or managed by women, outperformed
to the HFRI Fund Weighted Composite Index and the HFRX Global Hedge
Fund Index consistently from 2007 (Q1) until 2015 (Q2), the last
time data was publically released.
The topic remains a present one as well. In a Luxembourg study
published last year called Does Female Management Influence
Firm Performance? Evidence from Luxembourg Banks,1
the authors found that, in short, the answer to the question they
pose is yes. "The economic effect is substantial: a 10%
increase of women in top management positions improves the
bank's future return on equity by more than 3% p.a."
Breaking down, building up
So, the data is encouraging, but change remains slow. Most
respondents to last year's survey report many problems that are
far from new: 36% said that it's harder for women-owned or
-managed funds to raise capital due to the stereotype that women
are more risk averse; on the same issue, 49% cited the stereotype
about women putting family and personal interests ahead of
Many respondents also reported frustration at the no-win path
ahead: many consider that making alternative investments (and
indeed the wider field of business) into a gender issue is not an
ideal solution, since a more just road would be to gain success
based on knowledge, hard work, and all the regular industry tricks.
Yet ignoring the issue means that stereotypes like women neglecting
work for family will keep bearing fruit. (Let's not forget when
Paul Tudor Jones remarked in 2013 that the emotive connection
between a mother and her baby will "overwhelm" her desire
to understand what makes numbers rise and fall, and that a man
"will never share" this feeling).
Room for more
One factor slowing change may be the double setback of fewer
women interested in joining the industry (which 31% of respondents
reported observing), together with the fact that women are already
under-represented—72% of investors said that the greatest
barrier to investing in women-owned or -managed funds is simply
that there aren't enough of them.
"Within alternatives, we've seen women perform
extremely well," says Sandra Horbach, Managing Director of The
Carlyle Group. "And yet there are still not a lot of women
interested in entering the industry. Given many firms are finally
focusing on increasing diversity, I believe there's never been
a better time for women to enter and succeed in this
As we gather the results of our 2016 survey, we hope to see
results that continue this thread of optimism, and we'd
particularly like to see an acceleration in the numbers of women in
C-suite positions and of investment in women-owned or -managed
funds. Stay tuned for the release of the survey and our analysis
here on the KPMG Luxembourg Blog.
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