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 alternative investment?

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 sector.

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 work.

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 business."

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.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.