When investment guru Charles Ellis visited South Africa last year, he began his presentation by making an observation. It was obvious to him, he said, that he was speaking to a room full of investment professionals because there were almost no women present.
South Africa isn’t unique in this. It’s something he sees all over the world, and something he believes the industry should be questioning.
Why is it that asset management remains so dominated by men, particularly in investment decision-making roles? And why has it been this way for decades?
The shift that never happened
Nicola Ralston, formerly head of global investments at Schroders and now a director of PiRho Investment Consulting in the UK, says that when she entered the industry more than 40 years ago it was not a common career choice for women, but she thought this would change with time.
“A generation earlier women typically didn’t go into professional jobs, but I thought that in 40 years things would naturally have changed,” Ralston says. “Yet, here we are and very little has changed.”
She does not believe that there are many more women in senior investment decision-making roles than there were when she started.
“Everywhere I go I see women in every other job at a top level in the investment value chain,” says Delphine Govender, chief investment officer at Perpetua Investment Managers. “But I see almost no women as chief investment officers or portfolio managers.”
The obvious question is why this is, particularly since there is no objective reason why women shouldn’t succeed as fund managers. There are currently as many women as men qualifying with appropriate degrees, and many are joining firms as junior analysts.
“So where is the breakdown?” Govender asks. “Because the job is about intellect. It’s also objectively managed. If you recommend a share, does your investment case turn out to be true? The numbers will tell you.”
Govender believes it can partly be explained by the fact that there are cultural factors in the industry that many women struggle with.
“Girls are among the best performers at school and university, but that success does not translate into equivalent success in the workplace,” she says. “I think that’s because investing is unusual in that perceived success is measured in your ability to express your opinion. Often girls are raised to not speak up until they believe they have the full game plan. They’re good at exams because there is an exact answer, but investing doesn’t work that way. The best money managers in the world only get six out of 10 decisions right.”
The industry has also traditionally valued a killer instinct – a ruthless desire to succeed, typically at the expense of someone else. There’s little reason to believe that this is, in fact, beneficial, but it is prevalent. And again, Govender points out, it is not often a natural fit for women.
“When women come to an environment like this, where the belief is that what motivates people is the pursuit of profile, power and money, they often look at it and say: ‘How much of my real me do I have to suppress so that I can nurture the me that needs to be recognised?’”
Stepping off the escalator
The demands of a high-pressure job managing other people’s money also have to be weighed against other lifestyle choices.
“I think there is undoubtedly, in your mid-career, a point when you have to make choices around lifestyle and family,” says Jeanette Marais, CEO of Momentum Investments. “You realise that it is almost impossible to have everything. Daily, I see how my female colleagues struggle with it.”
Ralston believes this struggle has had a profound effect on how many women progress in the industry.
“What I see is women who develop good careers, who still want careers, but because of their own lifestyle needs, have changed the way they work,” she says. “They have moved away from front-line roles to support roles, from working full time to working part-time, have taken long periods away from work, or gone to other jobs that are more flexible.”
Effectively, this means that they take themselves out of the running for the top jobs.
“It’s not because firms discriminate against them in general, but the way firms expect those roles to be filled and the lifestyle that comes with them is unappealing,” Ralston explains.
The dilemma this raises for the industry is obvious.
The shift that is happening
“What I find fascinating is that in MMI, which is a big organisation, 50% of employees are female,” Marais says. “But the moment you get to senior management and higher, that percentage goes to the lower teens. It’s something we have to be deliberate about. We have to have a plan to bring women through. It won’t happen by itself.”
As the CEO of her organisation, Marais is obviously in a position to be able to do that, since she understands intimately what is required. However, in the broader industry, this isn’t the case. If women aren’t progressing to senior positions, who is going to change the culture?
Ralston believes the answer probably lies in reframing the problem, and not seeing it as one just about women.
“Ironically, I think the change will come because men begin to realise that the environment isn’t working for them either,” she says.
The demands of the job may always be there, but the ego-driven culture that has shaped the way the industry works for decades is shifting.
“Men now also want flexible time, to be able to pick up their kids from school, and to be able to work from home,” says Govender. “So I think the funny thing is that men are going to change the culture because they are more in touch with what they want from their lives. The environment and cultures are becoming more enabling because they want this dimensional balance for themselves.”