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Women in Fund Management


Science, while assumed to be dispassionate and rational, has long been actively implicated in the oppression of women.

 

Britain’s Royal Society of scientists barred women for almost three hundred years, on the grounds that women were not “legal persons.” The first women were admitted to the society in 1945. Not even history’s most famous female scientist, Marie Curie, was recognised. The French Academy of Sciences – the equivalent of Britain’s Royal Society, rejected her application for membership. Harvard University refused to award her an honorary degree. These rejections came despite Curie being the first woman to win a Nobel Prize in science and the only person, male or female, to win Nobel Prizes in two different sciences (for physics in 1903 and chemistry in 1911).

 

In total, only 15 women have won Nobel Prizes in science, compared to 540 men, making women 36 times less likely to win than a man.

 

Rosalind Franklin, for example, took better pictures of DNA than anyone before her, which she analysed by means of a complex mathematical equation called the ‘Patterson function’. While Franklin was concluding this work, her King’s College colleague, Maurice Wilkins, showed her data and pictures to James Watson and Francis Crick, without her consent or knowledge. Watson and Crick leapt to the conclusion Franklin was diligently proving – that the structure of DNA was a double helix – published it, and then shared the Nobel Prize with their secret source, Wilkins. When Rosalind Franklin died, she did not even know the three men had stolen her work. Even after her death they did not give her credit.

 

Even in our new post-genomic age, the game of claims is rigged in favour of white men. This is known as the Matthew effect, after Matthew 25:29, which writes, “For whoever has will be given more, and they will have an abundance. Whoever does not have, even what they have will be taken from them.”

 

The work of historians of science to bring the achievement of female scientists to public attention has been inspiring for young scientists. Rosalind Franklin’s work intrigued Jennifer Doudna and led her to becoming a scientist. Doudna and her team discovered the code for gene editing.

 

On 7TH October 2020 The Royal Swedish Academy of Sciences  awarded the Nobel Prize in Chemistry 2020 to Emmanuelle Charpentier and Jennifer A. Doudna ‘for the development of a method for genome editing.’

 

Since Charpentier and Doudna discovered the CRISPR/Cas9 genetic scissors in 2012, their use has exploded. This tool has contributed to many important discoveries in basic research. For example, plant researchers have been able to develop crops that withstand mould, pests, and drought. Further, in medicine, clinical trials of new cancer therapies are underway, and the dream of being able to cure inherited diseases is nearing fruition. These genetic scissors have taken the life sciences into a new epoch and, in many ways, are bringing the greatest benefit to humankind. The vaccines developed for immunisation against Covid-19 may be largely attributed to their findings.

 

Rosalind Franklin’s experience is not unique and, in most professions, and across numerous disciplines the same has held true – white men have taken most of the credit that women should have received. This has been aggravated by the fact that women have been held back from demonstrating their full potential through a lack of opportunities and support. Many potential Franklin and Doudnas are out there and remain stifled.

 

In both the boardroom and portfolio management, women are under-represented. It is time for leaders of asset management companies to tackle the shortage of women in senior roles.

 

Many firms are focused on gender diversity but, despite some advances, private client investment and financial planning group Bestinvest found last year that only 7% of retail investment funds, such as unit trusts and OEICs, were managed or co-managed by women.

 

According to Morningstar, at the end of the first quarter of 2015, female fund managers made up only 9.4% of fund managers managing US open-ended funds, and 11.8% of managers for exchange-traded funds. Women exclusively managed 184 funds, representing about 2% of the industry’s funds and assets.

 

The Nobel Committee’s recognition of two of the greatest female scientists in recent years, I hope, will mark the beginning of much needed change in all other spheres of life. As a co-owner of a boutique fund management company working with a team where I am the minority as a white male, I have no doubt that women in the past made a huge contribution to fund management and will continue to do even more in the future. It has been proven time and again that women are just as capable as men in fund management disciplines.

 

  • A study published by Goldman Sachs found that 48% of female-managed funds outperformed from the market low in March through August, compared with 37% for all-male funds. Funds managed by females also held up better in the Covid-19 market meltdown that hit bottom in March.
  • During the trailing 12 months, female-managed hedge funds have outperformed, reports Chicago-based Hedge Fund Research.
  • Women hedge fund managers delivered nearly double the performance of men from January 2000 through May 2009, a period bookended by the dot-com meltdown and financial crisis, says a study by Hedge Fund Research. The same study found female-managed funds held up much better in 2008, falling 9.6% compared with 19% for male-run funds.

 

Women are rich in the skills groups needed to make good decisions, such as listening, considering lots of information and divergent viewpoints, and effective time management skills. So, it follows that they are good at choosing the right stocks to buy. “It is about careful decisions, which entails a more prolonged decision-making process,” says Maria Negrete-Gruson, manager of the Artisan Sustainable Emerging Markets Fund. “A more diverse group makes better decisions. So, having females or female leadership could contribute to outperformance.”

 

In recent years in South Africa and world–wide, women have gained more recognition for their abilities as fund managers. I have no doubt that in the next ten years a woman will be the next Warren Buffet, or Charlie Munger – and be recognised as a Star Fund manager in her own right.

 

Mel Meltzer investment manager and cofounder of Platinum Portfolios

 

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