Renee Haugerud, Founder and Chief Investment Officer of Galtere Ltd., issued a challenge for young women in the investment space. “It really is an industry where you have to be a self starter. So dare to be bold. Dare to have a view point. Take everything you know and make a decision. Put your money where your mouth is and dare to start a company.”
Haugerud founded Galtere 15 years ago, and she is enthusiastic about increasing diversity in the investment space. She believes it will strengthen the entire industry. That’s why she and her husband founded the Galtere Institute at the University of Tennessee at Chattanooga – to encourage women to go into trading, to examine the gender differences that have made the industry the way it is today, and to examine how it can evolve in the future.
“If we can teach men a more female-centric view of trading, and we can teach women a more male-centric view of trading, we’ll have the best of both worlds,” she said.
Haugerud believes her childhood had a big influence on the person – and the professional – she ultimately grew up to be.
Her father was a sheriff, and in rural Fillmore County, Minnesota, that meant he was also the jail keeper. “He was the last resident sheriff, which meant my house was literally also the jail. The jail door was ten steps from my bedroom door. Growing up in a jail, you are presented with two sets of realities, that things are never as they seem. Both of my parents taught me that just because someone was in jail, it didn’t mean they were a bad person – they had made bad choices. And similarly, just because you’re not in jail, it doesn’t mean you’re a good person. There are plenty of bad people who aren’t in jail,” she explained. “That experience taught me to make sure to look at everything carefully.”
She also learned some of the building blocks of trading from her father, who, in addition to his job as sheriff, was a part time farmer and pilot. She recalls going on a trip with him in his airplane as a child of about four or five years old to look at his crops. “We were looking out over our corn crop that he planted and then we flew to Iowa to look at crops he hadn’t planted. When I asked why, he began to explain exchange futures to me, that if the crop looked good, he would sell more corn than he’d grown – it was the concept of going short and long, the concept of trading. That instilled an interest in valuation in me at an early age.”
She believes that parents shouldn’t shy away from teaching their children about complicated concepts. “Don’t underestimate what they can understand,” she advised. “I’m very thankful to my parents for that.” In fact, at Galtere, Haugerud – who was honored last month as a role model by the Girl Scouts of Greater New York – recently invited a Brownie troop in to learn about currency trading. “By the end of the day, they had a better grasp of it than some college students,” she remarked.
Before delving into the world of trading, Haugerud studied Forest Resource Management at the University of Montana. But that interest in supply and demand that had been instilled in her as child drew her to begin a career at Cargill Inc., where she began as a commodities trader in 1981. “Over the years, I made a lot of lateral moves, getting as much experience as I could. I traded in every asset class and geography, from foreign exchange, to fixed income, to equities, to high yield, to structured debt.”
Her career took her around the world, managing teams and running offices in the US, UK, Switzerland, Hong Kong, and Australia. “Eventually, that depth and breadth of experience gave me the skill set to go out on my own,” she said.
In 1997, she founded Galtere and after setting the business up, she began managing the commodity-based macro strategy in 1999. “I’m really proud of coming up with the Galtere trading methodology – it’s very straightforward. But what I’m more proud of is to have a nice, smart team of people to work with. The trading process can really be institutionalized, but it’s the people who make the difference in the outcome.”
She recalled a piece of wisdom an acquaintance shared with her – that there are two ways to have an edge in the hedge fund business. You can either have superior information, or a superior synthesis of information. “There’s so much information out there now – it’s hard to say anyone has superior information. But I truly believe that synthesis of information is a skill at which Galtere excels; we distill that information throughout the process in our search for the best trades.”
She has the numbers to back up her assertion – looking at over 14 years, the fund is annualizing at over 12 percent.
That’s not to say it’s always been easy, she continued. Early on, Haugerud wishes she had paid more attention to her soft skills. “I wish I had realized the importance of marketing, that investing isn’t really just about returns.”
“It’s really important to have good investor relationships and I wish I had been stronger at that,” she reflected. “It’s not just about the returns, but communicating about returns and relationship management.”
Haugerud is enthusiastic about the way the hedge fund industry is opening up to a new class of investors. “The hedge fund industry is making a big transition, with mutual funds and 40-act funds investing in alternatives. It’s a dynamic aspect of the industry that provides the retail investor with access to alternatives,” she explained.
“Retail investors should have the opportunity to invest in alternatives. Equities can be extremely volatile, and to have all of your savings sitting in long only products is dangerous,” she continued. “Every prudent investor should have the ability to invest in alternatives, particularly real assets and commodities.”
Diversity in Trading
In recent years, many have taken notice of research – like Rothstein Kass’s study on the alternative investments industry – showing that women outperform men when it comes to investing. “I’ve always known women to be really good investors,” Haugerud said. “Statistically, women outperform men in the long term. This is not a subjective statement. It’s a fact, and it’s been discussed for a long time. I think the first time I read it was in the ’80s in Money Magazine.”
She continued, “Conventional wisdom seems to suggest that women don’t take as much risk as men. This isn’t true. I firmly believe that women take as much risk – and sometimes even more – than their male counterparts, but at the same time I believe that women embrace risk management at a much stronger level.”
“We really need to be educated about the different ways women and men in general approach the markets, and work toward integrating the complementary strengths of each.”
To that end, Haugerud and her husband, John Murphy, created the Galtere Institute at the University of Tennessee at Chattanooga to explore the ways women and men trade differently, and how those differences can be leveraged. “This is a generalization of course, but I think men tend to approach trading from the left side of the brain, whereas women tend to incorporate both the right brain and the left brain.” As Haugerud explains, “One of my favorite quotes states that ‘The science of trading ponders the past, and the art of trading focuses on the future. A reasonable investor needs a good mix of both.’ The ‘past’ is dominated by statistics, and quantitative analysis, while the ‘future’ encompasses creativity and behavioral aspects of potential outcomes.”
The Institute, which also hosts an annual public symposium on the neuroscience of trading, provides professionals and students with an overall fundamental look at the behavioral aspects of investing and how neuroeconomics affect return and risk.
The next symposium will take place in October, with John Coates, author of The Hour Between Dog and Wolf, as a featured speaker, and it will be led by the Institute’s program director Sue Culpepper. In the future, Haugerud envisions an Institute granting certificates and hosting graduate programs. “The Galtere Institute is still a work in progress, now in its third year.”
The Institute also seeks to encourage more women to go into trading. One of the big barriers to entry for women is the challenge of raising money (both operating capital and AUM), Haugerud explained. “Relationships can go a long way in overcoming this hurdle,” Haugerud suggested.
To that end, she also encourages women to build stronger relationships with one another. “Men are really excellent at helping each other – this is something I believe women would do well to emulate. While women tend to be more reticent about voicing support for other talented women, men do not hold themselves back: if they like someone, they make sure to support him 100 percent. They are really good at making sure their peers are taken care of, and women should feel comfortable doing the same when they meet other talented women in the industry.”
Haugerud says diversity is a topic of importance at Galtere, and the firm embraces gender and cultural diversity across its staff – not for the sake of altruism, but as a necessary foundation for a successful team.. The firm also hosts summer scholars from the Galtere Institute.
In Her Personal Time
“I really believe you can have it all,” said Haugerud, a step-mother of two. “An important part of the picture is the right spouse, that you have a spouse who is a supportive of you and that you are supportive of your spouse. Then it’s just like investing – you have to have structural systems around your professional life such that your career will complement your personal values. I believe that an investment career in particular requires well-rounded individuals; work should be a subset of life, life is not a subset of work.”
“I think trading is one of the best options for all women – married, single, working mothers – offering a degree of flexibility that is not possible in other careers. You can trade from anywhere as long as you have a strong team. You’re working hard – but in every job you work hard. A lot of women don’t know about this!”