Voice of Experience: Ivka Kalus-Bystricky, Portfolio Manager, Pax World

By Melissa J. Anderson (New York City)

According to Ivka Kalus-Bystricky, Portfolio Manager at Pax World Funds, one of the most critical lessons she’s realized over the years is the importance of learning to cope – with both lows and highs.

“This business can be a somewhat bipolar world, particularly in volatile markets such as we have seen of late,” she said. “Although you may not fully realize that before you get in, you really do have to develop coping strategies. Investing is ultimately about putting all your bets on the table against the market and against your peers. And, like the song goes, ‘you gotta know when to hold ’em and you gotta know when to fold ’em.’”

She continued, “Your hand can be either a winner or a loser, and it really depends on what everybody else is holding. It comes down to having a strong, consistent investment discipline, and to timing, and perhaps a little bit to luck on occasion, but there’s always a good deal of uncertainty. You go through long periods of time when what you’re holding – your strategy – is just not working, and it can get quite frustrating. But then sometimes, to use a surfing metaphor, you’re right in the tube. You feel like the biggest genius in the world.”

“You have to learn to attenuate both the highs and the lows. You have to develop a really structured framework to prevent your emotions from getting in the way,” she explained. “It means taking a disciplined approach to the market.”

Managing Launching Funds

Kalus-Bystricky has been at Pax World for about four years, having launched the firm’s International Fund in March of 2008. She just took over as lead portfolio manager of the firm’s Global Women’s Equality Fund in January as well, now managing both products.

But before joining Pax, however, she built up a wealth of industry experience. “And since I have this foreign-sounding name and speak lots of languages, people never guess that I grew up in Amarillo, Texas,” she said with a laugh.

After studying biology at Harvard, and resource economics at the Fletcher School of Law and Diplomacy, Kalus-Bystricky began her career as a management consultant at Arthur D. Little, where she worked in her native Prague, “just as the iron curtain was coming down,” she noted.

“Then I moved back to the US and worked in Arthur D. Little’s resources practice before earning an MBA at INSEAD and then joining Putnam as an analyst in metals and mining, then media.”

Later she joined Baring Asset Management, managing institutional funds, and then moved to State Street Global Advisors, as a portfolio manager for the firm’s International Growth Opportunities Fund.

Kalus-Bystricky said her tenure as portfolio manager of the Pax World International Fund since its launch in early 2008 is what she is most proud of so far. “I had worked in the international fund space as an analyst and portfolio manager for ten years. I’d had lots of great mentors and I saw the mistakes others had made and the ones I had made myself. And I figured out how I would do it – launch a fund. And then all of the sudden I got my chance.”

“It’s a lot different to start a product – you have to be willing to take on the challenge of putting into practice everything you thought would work, and then be fully accountable for the results” she explained.

Currently, Kalus-Bystricky is excited about taking on the management of a second fund at Pax World, the Global Women’s Equality Fund. “It’s the only mutual fund to focus on investing in companies with global leadership in gender equality. It’s an exciting new challenge.”

Critical Mass in the Investments Industry

“Having worked at quite few firms, and having interacted with people in the industry for a long time, I’ve seen that there can be too much of a groupthink herd mentality that comes from a lack of diversity. There’s very little racial and gender diversity – and I think it’s perpetuated by the way people hire those similar to themselves.”

She continued, “Only 3% of hedge fund managers are women and 10% of mutual fund managers are women. Women are real minorities in this business,” and, she noted, that’s related to what could be seen as an industry-wide culture of “bluster.”

“Confidence is a prized trait in this industry – and of course – who wants a portfolio manager who isn’t confident in their abilities?”

She continued, “But, by and large, women don’t bluster and they tend to admit when they’re wrong. This can work against us in this field.”

Kalus-Bystricky pointed to studies by organizations like Catalyst showing the business value of diverse leadership. “We know all this, and yet our industry seems to have forgotten that having women at the table enriches decision-making. This lack of diversity really makes no sense from a business or investor perspective. We really need to address it.”

But, she asked, how can the industry correct the imbalance? “It’s a bit of a chicken and egg problem,” she explained. “There aren’t enough women because there are so few women blazing the trail. It’s a challenge and a barrier to women entering the industry.”

She suggested that reaching a critical mass of women in the industry can help change this. “Women feel more comfortable adding input and contributing and not acting like guys when there are about 30% of us in the room. But how do you get to that critical mass?”

At PAX, she added, the gender ratio is about 50/50. “It feels completely normal – there’s no drama, there’s no bluster. It’s just not part of our culture.”

“But, overall, asset management is over 90% male. I don’t know how we get the industry to that critical mass but we need to find a way,” she said.

Challenges for Professional Women

Kalus-Bystricky believes concern over work/life issues keeps women out of the industry. “You start worrying about it – but it’s a myth. Work is life – just find a job that you can master and that you love. It just doesn’t make sense to ruminate on it ahead of time.”

She continued, “Early on, you have to spend a lot of time to master jobs – that’s the way the world works. I remember working 100 hour work-weeks. But once you become more successful and get better at managing your time, you can get it down to much more manageable work-weeks and get a whole lot more done at that.”

“Women sometimes short-circuit our careers by aiming too low. We tend to lower our ambitions in the early stages of our careers, during the tough, tooth-cutting period that everybody has to go through.”

Kalus-Bystricky also advised women to think carefully about the work environment they want. “Choose a culture that fits your personality,” she said.

As women become more senior, she continued, it’s important to be remain open-minded. “The challenge is not to get ossified in your approach to investing,” she advised. “What might have worked ten years ago might not work anymore.”

She explained, “Don’t dismiss anything right away, but you still have to be disciplined. You have to be willing to adapt that discipline to respond to the changing market.”

Networking is key for women at any stage of their career, she continued, especially in keeping up with industry trends. “I’m a member of 85 Broads, for example, and most of the members – all you have to do is ask and they’re more than happy to share their experience and give you advice.”

When it comes to women in investments, Kalus-Bystricky said Pax World is ahead of the curve. “Half of the funds we manage in-house are managed by women; half of our wholesalers in the field are women, and half of our sustainability analysts are women. Pax makes sure we put qualified female candidates in the hiring pool for every position,” she explained.

“It’s the first company I’ve worked for that I feel I am paid at the same level as my male peers, and the company provides the same amount of time off for maternity and paternity leave. I think it fosters a really healthy environment.”

She added, “All of these policies were in place before I got here. We can push that message to other companies as investors if we are practicing it ourselves.”

In Her Personal Time

“I have two kids and I’m really proud of my family,” Kalus-Bystricky said. “My daughter is a freshman at Oxford, and my son is into robotics and tennis. My husband has his own company. Everyone in my family is accomplished and I feel like some of that is the values I’ve instilled in them to work really hard and go towards your goal.”

She added, “My family is an important part of who I am.”