By Caroline Bagshaw, chief people officer at IQ-EQ
More than a hundred years since women first participated in the modern Olympics, Paris 2024 has met a significant milestone for diversity, equity and inclusion (DE&I) as the first Games to reach full gender parity. While it’s been a long and slow process, shifting gender imbalance in the Olympics marks a new era of diversity in sports.
The asset management industry, however, is yet to follow in its footsteps. A recent McKinsey report found that women hold just 23% of all investing roles at private equity firms globally, with men continuing to dominate financial management roles.
Traditionally all-male senior investment teams have created a legacy of male-dominated networks and mentorship opportunities in these areas. The fund services and investment support sector, however, is interestingly less skewed towards male employees.
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Exploring the factors that attract a diverse workforce into investment support functions is a useful first step in rebalancing gender representation throughout the entire asset management industry.
This balance cannot be addressed within an organisation’s four walls alone – it requires a sector-wide approach to ensure that fresh perspectives, technological proficiency, and adaptability are welcomed and valued within the workforce.
Visibility creates possibilities
That we’re seeing positive shifts in investment support roles means the beginning of a sea change in gender balance across the whole asset management industry. Empowering women in private equity has long been a goal for. But making real strides in DE&I requires more than the occasional ‘token hire’, or a one-time gender training session.
Addressing the gender imbalance in the industry ensures companies don’t miss out on female talent. Women have enormous purchasing power, controlling the majority of household spending and in most categories of consumer goods.
So why does the power switch when it comes to investment capital? Surely women have an understanding of which products and services truly meet consumer needs and are also well-positioned to excel in investment decisions.
This is why we have spearheaded IQ-EQ Launchpad, a unique initiative designed to support first-time female fund managers to launch and build their funds. This includes a comprehensive support package providing women fund managers with tailor-made training, as well as preferential service terms, access to a global network, and knowledge-sharing to bridge the gender gap.
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Championing women in leadership positions has also been a priority of ours. Women represent almost 40% of IQ-EQ’s global management team – an increase from 10% in 2021. Some 49% of all line managers are female, while 53% of the 558 people promoted in 2023 were also women.
This is a testament to the internal initiatives we have implemented to bring greater gender inclusion and equity to fund management.
For instance, IQ-EQ’s Elevate scheme is a bespoke women in leadership development programme designed to suit all career stages. It supports female employees through workshops, guest speakers, clubs, and groups, with an additional 138 participants going through the programme in the last year alone. This is reflected in the increasing percentage of women across our senior management teams.
Building a culture of inclusion
Whilst training, mentoring, and support is important to improve gender equity across asset management, it’s other initiatives that have a greater impact on inclusion
Access to fair and equitable compensation, including pay, promotions, and a flexible working environment are all critical to attracting and retaining female (and of course male) employees. Asset management firms should regularly review pay equity, to identify any discrepancies in pay based on gender.
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While tradition is always moving, it’s still the case that women are more likely to play the primary role in caring for children or other family members and tend to make better use of flexible working arrangements
As many bigger financial institutions turn their backs on remote working and push their employees back to the office five days a week, they risk losing out on a wider talent pool (men and women) and other underrepresented groups.
Collective strategies to shatter the glass ceiling
The growing acceptance that diverse investment teams yield better results is a promising sign that the tide is turning in asset management. Bringing fresh perspectives and more well-balanced teams is not only the ‘right thing to do’, it also adds value to firms’ bottom lines.
As well as individual firms focusing on this, it needs an industry-wide approach to address the structural issues at the heart of this challenge and ensure that women in asset management are on the same ladder and can also climb as high as they want!
