Study: Women in Alternative Investments See Brighter Days Ahead

By Melissa J. Anderson (New York City)

“Even during this time of economic turmoil, women are generally positive about the ability to find investments in the industry,” said Kelly Easterling, Principal in the Financial Services Practice at Rothstein Kass and Principal-in-Charge of the Firm’s Walnut Creek office.

Rothstein Kass, the alternative investments professional services firm, recently released the results of its study, “Women in Alternative Investments – Industry Outlook and Trends.” The firm has been performing surveys on industry views since 2007, Easterling explained, but “the vast majority of the respondents had been male. We wanted to find out if perceptions are different for females, who are underrepresented in the industry.”

She pointed out that the alternative investments workforce is roughly 90% male and 10% female. The survey, completed in partnership with 85 Broads, polled 189 female executives in hedge funds, private equity, and venture capital. The majority (67.2%) agreed or strongly agreed that the next 18 months would be difficult for the industry.

But 61.9% said there will be more fund launches in the next 18 months than there were in the prior 18 months. Most of the women felt the fund environment would improve.

The researchers had expected a more tempered response, given the state of uncertainty in the economic environment and challenges within the financial services industry. “Women really see this as a viable business opportunity, particularly as more women continue to join the industry,” she said.

Importance of Networking

Only 24.9% of those polled said that it’s just as easy for women to raise capital as male managers. And almost two thirds (63.5%) agreed or strongly agreed that “being a woman makes it difficult to succeed in the industry.”

Many women surveyed felt they are at a disadvantage compared to male peers for a few reasons. For example, 42.9% felt that “women often lack the investment track record of their male peers.” Additionally, 34.4% believed, “women are hindered by the stereotype that they are more committed to personal responsibilities than their work.” Almost a third (31.7%) felt that women managers “have less access to investor networks.”

Easterling said the value of networking was evident by the number of women participating in women’s networks in the industry – like 85 Broads and 100 Women in Hedge Funds. And, the survey revealed, 67.8 % felt that women’s networks were either very useful or moderately useful.

“The majority of women talked about the fact that their personal success is based on their participation in networks,” she said. “It highlights the importance of being able to continue building relationships.”

Building Relationships

Easterling said one of the strengths of the survey was the fact that it also included qualitative input from a panel of senior industry women – like Virginia Cargill, Venture Partner and CEO of Health Focus Media; Helen MacKenzie, Managing Director of Women’s Venture Capital Fund; Cindy Padnos, Managing Partner of Illuminate Ventures; and Dorothy Collins Weaver, CEO and Chairman of Collins Capital.

In fact, she said, the participation of so many high level women on the advisory panel revealed senior women’s interest in drawing more women into alternative investments and helping them advance. “Women want to see people succeed in this industry – we didn’t have anyone say no to participating on the advisory panel.”

Many of the women on the panel discussed the importance of building, maintaining, and leveraging relationships for success in alternative investments. Easterling pointed to Weaver’s comments in the survey on the importance of leveraging relationships at fund launch. She said:

“Many funds launch with capital from friends and family, but I haven’t seen many women fund managers go to their own friends and family for initial funding. I’m not sure if they are not asking or if they are asking but not getting the funds.”

That may be related to women’s more understated approach to self-promotion, Easterling commented. “I think men tend to beat their chests, but women are more prone to dot every ‘i’ and cross every ‘t,’ she said.

“The other part is your track record. I think the longer women are in the industry the easier that will get, allowing more women to proliferate in the industry.”

Outreach by female role models will also be key to increasing the percentage of women in the industry. “Weaver also mentioned the significance of mentors. She said mentoring for female leaders is a significant responsibility,” Easterling added.