The funds management industry is facing an imbalance between supply and demand of female talent. In an industry that has not changed much over the last 20 years, recruiting employees from a diverse range of backgrounds becomes especially important.
Amid a greater focus on achieving gender equality and bringing more diversity into teams, the funds management industry has also recognised the need to attract more female talent. Studies show that the more women a team had, the better they performed, while companies led by female CEOs deliver returns that are 226% higher due to fostering a more effective corporate culture that leads to success. This awareness has created strong demand for women in finance roles such as funds management.
However, there is a lack of supply to fill that gap. This stems from two fundamental problems. The first of these is a lack of awareness of funds management as a potential area of work after university. Traditionally, finance students tend to navigate towards investment banking or chartered accounting to launch their career, says Katie Hudson, portfolio manager at Yarra Capital Management. This occurs as many portfolio management firms are small private companies, and do not invest as much time and effort as large investment banks or professional services companies in recruiting graduates. However, funds management is a “really exciting career option” beyond the traditional roles known to students. In this aspect, designing well-structured graduate programs and offering internship opportunities to university students could help to fill the demand.
Perceptions of the industry and a belief among female students that they won’t fit are other culprits behind the lack of female representation in finance and investment management. For instance, the finance industry has a poor reputation for long work hours, and a recent survey among first-year Goldman Sachs investment banking analysts revealed that 77% reported as having been victims of workplace abuse. Further, the 2020 Financial Services Institute of Australasia (FINSIA) Gender Divide Survey found that 77% of female respondents believed that women from diverse backgrounds face additional barriers to corporate leadership, compared to only 42% of male respondents. However, these perceptions may not always be true. Hudson describes portfolio management as “an incredibly rewarding and fascinating job”, something she has managed to balance well with raising children and achieve with reasonable success.
In the modern day and age, shifting the dial towards greater inclusivity and diversity in teams helps to deliver better outcomes and improve productivity. To attract younger and more female talent to fill the gap, investment management companies need to address the concerns of graduates and reshape their brand.
