14/03/17

Women-Run Hedge Funds are Leading the Pack

If being smarter at making money than their male counterparts is what it takes for female fund managers to make money, then women are doing just that. According to Hedge Fund Research (HFR), in the first months of 2017, women run hedge funds have outperformed male run funds by 1.42%. Women led funds have brought in 3.65% in returns compared to funds led by men that have brought in 2.23% returns. While the hedge fund industry as a whole has been outperformed by the S & P which has returned 5.94% during the same months, women are advancing in bringing in competitive returns, reports Investopedia.

Only about 2% of the 2100 hedge funds tracked through Hedge Fund Research (HFR) are woman led and managed. As a result of outpacing others in the industry, KPMG in its 2016 Global Women in Alternative Investments Report has noted that there has been an increase in cash going to women led funds. The report features surveys of 791 women in asset management and tracks their views on gender within the hedge fund industry. 79% of those surveyed believed that it was still harder for women to succeed.

The controversial use of mandates for emerging manager funds led by women has increased the number of women led funds in the industry. KPMG notes progress in the number of mandates growing for woman-owned managed funds from 2 to 10 percent. Of those included in the KPMG survery, over 26% of the woman led funds plan to grow their assets to over $1B in AUM.

Although many funds are required to include women managers as part of anti-discrimination policy, women are reluctant to bid under such mandates due to fears that their businesses will not be viewed as favorably. 40% of women-owned and managed fund survey respondents had pursued investment through mandate programs – an increase from 31% from 2015. Despite an ongoing gender lens in hedge fund investing, women are making gains. 28% of women surveyed said that they plan to launch a fund within the next 5 years.

The progress reported through Hedge Fund Research and KPMG are part of a five year trend. The HFRI Women index has returned 4.4 per cent within the span of five years. This percentage is in comparison with a 4.2 per cent return for the HFRI Fund Weighted Composite index which is an aggregate of returns across genders and investment styles. The HFRI includes 49 women led funds.