Claire Rentzke – CIO at Sukha & Associates
As a fund selector, how conscious are you of this lack of representation of women at portfolio manager level?
There is no doubt that this is an industry where men have been very successful and it continues to be an industry that is dominated by men. After years in the industry, I know that often I will be the only woman in the room. But this is not a phenomenon that is specifically South African, as globally the same is true.
I do think that locally there is more awareness of the need for diversity. As a fund selector, one of the things that we look for in a team is the presence of cognitive diversity. Cognitive diversity should create more robust decision-making processes as different perspectives and experiences allow for a more thorough analysis.
While this diversity doesn’t always automatically equate to racial or gender diversity (and it is easy to quickly stereotype people in discussions around diversity) the truth is that often women can be more risk averse, more willing to admit what they don’t know, and studies have shown that, on average, they do make better fund managers because they churn their portfolio less frequently.
Do you engage with asset managers about this? If so, how do they respond?
It is concerning that there are not more women who are in fund manager roles because there doesn’t seem to be a shortage of women in analyst roles, which is the training ground for future fund managers.
When we engage with asset management businesses on the lack of diversity within their fund managers, it is often acknowledged and seen as something that is definitely lacking in their teams. Many say that they are actively trying to recruit more women fund managers but are proving unsuccessful at it.
There is a split between those businesses who are willing to recruit seasoned investment professionals and those who look to “grow their own timber”. Neither of these models has proved particularly successful in increasing the number of female fund managers in the industry.
While no company intentionally sets out to impede the progression of women fund managers, there are often inherent barriers that do stop women from progressing. Asset management businesses would be wise to identify and break down those barriers. The reporting lines and the structure of the businesses may well play a role in creating an environment that is either conducive to the advancement of women or not.
Anecdotally, women seem to do better in environments that are structured more around collaboration, and less well in environments that pit people against each other and generate significant internal competition. But both environments can lead to good investment outcomes.
Does the level of representation of women affect your fund buying decisions?
Ultimately in selecting products for our clients, we want the best possible outcome for the client and we want to support sustainable businesses. We look for investment teams who can thoughtfully critique their investment decision making, who can assess the risks from all angles, acknowledging what they don’t know and deliver successful outcomes.
Diverse teams where women can succeed as women without having to try become more like men and bring their own strengths to the table and improve the robustness of the investment process and the industry as a whole is what we would look to support.