Voice of Experience: Michelle Clayman, CFA, Founder, Managing Partner & Chief Investment Officer, New Amsterdam Partners LLC

N_MClaymanBy Melissa J. Anderson (New York City)

“I was born and raised in England, and did my undergraduate degree at Oxford,” began Michelle Clayman, CFA, Founder, Managing Partner, and Chief Investment Officer of New Amsterdam Partners. After graduating, Clayman took a job in commercial banking with Bank of America in London for two years, before heading to California to attend Stanford Business School.

“After business school,” she said, “I took a job at Salomon Brothers in sales and trading, and then, after a few months, was asked to go into a new division called quantitative equity research, and I was there for six and a half years.”

“Then I decided to start my own company – and the rest is history,” she continued.

Clayman has built her career and her company on the value of performance-based quantitative metrics. And she believes performance-based careers, like those in investment management, are more amenable to women. Because they’re based on results, she said, there’s less room for gender bias.

Bringing Quantitative and Traditional Business Models Together

Clayman explained that she had been interested in running her own company since business school. She said, “When I started business school, I thought I wanted to rise up through the ranks of financial services. In the late 1970s at Stanford, I realized it was possible to start a company that wasn’t just a ‘mom and pop business.’ I was intrigued – but back then 26 year olds didn’t start businesses – so I went to Wall Street.”

She continued, “Salomon was an interesting place, when I went into quantitative equity research. I built models, I wrote reports, and I was also the person who was sent out on the road to teach clients about how to use quantitative methods.”

It was during Clayman’s time on the road that she began to formulate her own business model. “It struck me that there was a big chasm in the way the quantitative [investment side] viewed the world and the way the traditional [investment] side viewed the world. I thought it was silly that that we didn’t talk to each other and would be a very interesting investment process to combine the best of both worlds.”

Additionally, she said, “At the time Salomon didn’t have any woman managing directors, and my ability to become an MD seemed like it would be increasingly political from there on out. I thought ‘why not take the plunge?’”

Clayman is proud of New Amsterdam Partners’ success. She said, “I’ve built a reasonably sized business that’s provided good jobs for a number of people over the years. I’m also proud of serving my clients.”

She warned, “Running a company is a lot more difficult than it looks. But luckily I have had the persistence to ride the rollercoaster.”

Clayman also enjoys the performance-based meritocracy of the investment management field. One reason, she explained, is “that it’s one in which one can grow old. Traditional Wall Street careers are not necessarily friendly as individuals grow older. The top of the pyramid is very narrow, and supported by a younger base. Investment management is performance driven. If you continue to produce tangible results and keep all of your marbles, you can do it as long as you wish.”

Clayman is also intrigued by the ways the industry is currently evolving. She said, “One of the things we’ve done for a number of years is what used to be called Socially Responsible Investments, and is now known as ESG [Environmental, Sustainability and Governance]. We’re looking to expand our research capabilities to expand our understanding of that.”

She continued, “I’m also interested in the changing regulatory landscape. It’s disappointing that the industry has said in the past that it could self-regulate. In the last few years, we’ve seen that maybe adult supervision is necessary. The regulations will affect the shape of the industry for years to come, although investment management will probably be one of the least affected areas of the industry.”

Women in Investment Management

“I think the challenges women face are part of a business-wide issue, not just financial services. It’s a lot easier for women to get their foot in the door than it was 30 to 40 years ago.”

But while things have gotten better for professional women, there are still challenges. “The issue is because of the narrow nature of the top of the pyramid, women are getting squeezed out, or they fall off along the way, more than men,” explained Clayman.

She continued, “It’s quite unfair, but employers particularly view mothers with suspicion. They question their commitment to the job – regardless of how women actually perform.”

“Another issue is the women themselves. In their mid-30s, they get burnt out and start to think ‘there has to be a better way to live.’ Because [professional women] are not usually the sole breadwinner, they decide they don’t need to power their way through.”

“It’s a complicated thing – companies are losing women just as they are about to make the leap from mid-management to senior management. They’ve invested in this resource – it’s a shame to lose them. Of course, everyone has a right to choose their own fate,” she said.

She said, “Investment management is a little friendlier, I think. It’s performance based – if you perform well, the lifestyle is somewhat more family friendly.”

Regarding work/life balance, Clayman said, “The idea of balance implies that perfection is possible. You’re insane if you think perfection is possible. It’s about what trade-offs you are willing to live with.”

She continued, “I had a childhood friend from England who came up with a wonderful saying: ‘a mother’s place is in the wrong.’ Striving for perfection is unreasonable and unreachable. People just have to relax. Get the kind of childcare that will work for you. You can be more effective both at home and in your career.”

“It requires a lot of organization. You need to set up the support structure that you need. The most important decision women are going to make is whom they choose to marry. A supportive spouse will enable them to choose the career they want.”

Climbing the Ladder in Investment Management

“This is a great industry,” said Clayman, “and you’ve got to work hard. But working hard is not sufficient. I hate to use these terms, [but] you need to build your networking skills and your political skills. Both women and minorities should make sure they’re adequately credentialed. I’ve always gone overboard to get any credential that seemed reasonable.”

She explained, “If you have your MBA or your CFA, no one can say, ‘She’s unqualified for the job.’ And not only for women, but also for shy people: if you think good work will just be rewarded, it might be as long as you have a fair-minded and aware boss.” She continued, “But you have to be sure to let your colleagues and your boss know what you are doing in a nice way – go out of your comfort zone.”

“Don’t become an obnoxious blowhard, although this is a strategy that some on Wall Street use,” she joked. “A lot of research people are introverts. Make a point that every two weeks you go out to lunch with someone in the firm. Get to know people.”

For women rising up through the ranks, Clayman emphasized the value of the advice. She said, “Seek advice from wise people. There is a range of differing opinions. Sort through them and see what might work for you. Hang out with people in similar situations and swap ideas with them. Non-profit boards are a great place to do this – get fellow board members’ advice. Asking for advice doesn’t make you weak.”

She said, “All of the people who have been my mentors have been men. Out of business school in the late ’70s, there were not a whole lot of senior women. Think ‘whom do I find admirable and whom do I not find admirable.’

Clayman mentioned four people she felt had influenced her career significantly. She remembered, “I had one business school professor who was a venture capitalist. He stayed in touch with former students and offered advice in a non-judgmental way. And there was a senior economist at Salomon, who was known as the Wizard of Wall Street. It was my privilege, at least once a quarter, to enjoy an audience with him and I would feed him macro models. I was very junior, and he was unfailingly nice to me.”

She continued, “I also had a client who was visionary with his philanthropy work. He decided to use his wealth to [help fund] forward looking medical research – to not accept the way things had always been done.”

And finally, she said, “When I was due to graduate from college, I was looking at a career in financial services. A neighbor in the field told me, “don’t bother applying to British banks. Even though you have an Oxford education, they only want Oxford or Cambridge men who graduated from the top boarding schools. US banks won’t care that you’re a woman, and they will train you very well.”

Clayman said this advice still applies to young women entering the industry. She explained, “You’ve got to look at places where there will be, A, no unhelpful barriers that arise. And B, go to a place where you can make sure there are objective standards of measurement, besides temperament. The other thing is the training – make sure you train yourself up in all the tools you need – some are technology, but others are behavioral and organizational.”

New Amsterdam Partners is committed to diversity, said Clayman. “Thirty-five percent of our employees are women – which is amazing in the industry. And close to forty percent are minorities. We have a very active and diverse internship program.”

Additionally, she continued, “As a company we support a number of organizations, such as the National Council for Research on Women and the Girl Scouts.”

Keeping Busy Outside the Office

In fact, Clayman is a former Girl Scout leader. She said, “I recently ran into one of the girls who used to be in my troop – and she just turned out fabulously.”

Clayman is very vocal about the benefits of philanthropic work. She said, “I have many philanthropic interests. I’m involved in several charities in the New York area, including the Children of Bellevue which supports children in Bellevue Hospital. I’m very involved with Stanford where I did my MBA, and I co-chair our Women’s Initiative Network. I’m on the advisory council for the Institute of Gender Research and I’m on the Board of the Bard Music Festival. Additionally, I’m on the Council of the Harvard Divinity School.”

Outside her philanthropy work, she said, “I have a large extended family with whom I am very close, here and abroad. I have a horse, sheep, llamas, and cats. Pretty much all of the animals are rescue animals. I enjoy golf, and because of my English background, I also enjoy gardening. I knit sweaters with wool from my sheep. I keep myself very busy.”