In the FT last weekend John Authers wrote about the many studies that show female investors outperforming male investors, both in ordinary life and in the professional world. He pointed particularly to a Barclay’s report looking at the five years to March 2011.
During that period, hedge funds run by women and minorities returned an average of 82.4% while “non diverse funds” (those run by white men, presumably) returned only 51%. These numbers, says Authers, make it something of a shame that a mere 3.3% of hedge funds were run by “women or minorities” at the time of the study.
I’m not so sure.
It makes sense to add diversity into most things (homogeneity of thinking leads to the overconfidence that gives us bubbles) and money management is no different, a point Authers makes well.
But my guess is that the more women you get into hedge fund management the more their returns will converge with those of the men. The women who make it to the top of hedge-fund-land at the moment are the best and the most dedicated there are.
It isn’t particularly easy working your way up in finance (the hours are long and the work is intense) and more men stick at it than women (it’s all about children and alpha couples. see past blogs). So it makes sense that the women who make it outperform – they are just better.
Make the industry so different that 50% of managers were women and 50% were men, and that might no longer be the case.