Why are there still so few women-led asset managers?

Despite the growing body of research that shows women-led funds have the potential to outperform benchmarks, asset managers are still overwhelmingly led by men.
Why are there still so few women-led asset managers?

The number of diverse-owned asset managers is rising very slowly globally, and even slower still in the East. More can be done, experts said, even if the proportion of female key decision makers in Asia Pacific is higher than in other regions.

A 2021 study released by Knight Foundation found that only 16% of funds held by 25 of the world’s top foundations were managed by diverse-owned asset managers, a one percentage point increase from 2020.

In addition, women only make up 14% of portfolio managers globally, unchanged from the year 2000, according to Morningstar earlier this year.

Heidi Ridley, RadiantESG

“The reality is that some asset management firms have no female, or minority representatives at the board level and little representation within senior or investment focused roles, which is another area where typically there's a big gap,” said Heidi Ridley, founder of environmental, social and governance solutions-provider RadiantESG.

“There's the workforce participation more broadly, but then there's really looking at who holds decision making rights, who holds influential positions, and we're even farther away from seeing that materially change,” Ridley told AsianInvestor in a video interview from California where she is based.

After 30 years in asset management firms such as AXA Investment Managers where she was the global chief executive for Rosenberg Equities, Ridley decided to start up her own company RadiantESG Global Investors.

In July, the firm announced financing from HSBC Asset Management, and Ridley shared that it will be launching its asset management business by the end of the year.

“We founded RadiantESG with the ambition of launching an asset management firm that would combine next generation ESG data analysis, research and portfolio management with majority ownership by women and minorities,” she said. “And how we would do that is through holding ourselves to a standard and compelling others to follow suit.”


Asia Pacific contains a higher proportion of women-led asset managers compared with other regions, according to a 2020 report by Mercer. For instance, the proportion of key decision makers in China, Hong Kong and Singapore asset managers stood at more than 20%, ahead of nearly every other country except for Italy.

But the report said that a possible explanation could be that these were newer markets, established when women took up a larger share of the workforce.

Simon Coxeter, Mercer

“Relative to other regions, we have identified higher participation from women as key investment decision makers within asset management across some markets in the Asia Pacific region,” Simon Coxeter, director of strategic research for growth markets at Mercer, told AsianInvestor.

But “there is significant room for progress” and women continue to be underrepresented in the asset management space, he added.

“More can be done to build pipelines of female talent to reach senior leadership and investment decision-making positions within asset managers,” he said. “Gender equality can be promoted further by using data-driven insights to inform decisions and measure success, by setting clear and visible goals, and by driving culture from the top with a deep leadership commitment to action.”

While the consultancy does not have numbers to show the change in numbers of women-led asset managers over the decades, “anecdotally, we are seeing more women-led or women-owned asset managers in the region, though to a lesser extent compared with the US,” he added.


While there has been a growing body of research to show that funds run by women can get as good as or better performance than others, there are instances where the data works against the cause.

On Tuesday (November 9), Bloomberg reported that women and minority-led hedge funds had a median one-year total return of 21.6% and 29.6% respectively compared with 12.7% overall. Last June, the Financial Times also reported that hedge funds managed by women outperformed those led by men, losing 3.5% in the first four months of 2020 compared with the 5.5% loss in the benchmark index.

But one roadblock that Ridley faces is that many diverse-led asset managers or funds have not been around very long and tend to be small, and there is the “natural structural impediment in asset management where there is an expectation of a three-year track record of ‘X’ amount of assets under management.”

“Certainly asset owners want to know that you're going to be around a year from now that you have the resources to run a proper investment strategy and be good stewards of their assets. And so there's a lot of perception that gets mixed into that when you've got a start-up situation that isn't managing a lot of money,” she said.

But as ESG takes increasing importance, institutional investors should look at improving diversity in their ranks, she argued. “We definitely see an inextricable link between diversity and inclusion and environmental and social and governance issues,” she said.


Asset owners have been vocal about pushing for diversity in investee companies, but there is little evidence they require the same from asset managers awarded with their mandates.

Paul Milon, BNP Paribas AM

However, asset managers could get a push from other directions, “for instance investment consultant Mercer considers gender diversity and broader investment team diversity when assessing managers,” Paul Milon, head of stewardship for Asia Pacific at BNP Paribas Asset Management told AsianInvestor.

“Their ratings and recommendations are used by their asset owner clients, hence you could argue an investment team with good diversity profile is more likely to get recommended, all other things being equal,” he said.

"We have not seen as much interest from asset owners in this region to proactively identify minority- or women-owned asset managers, Mercer’s Coxeter said.

However, “change ultimately requires active participation and buy-in from a range of stakeholders within asset managers as well as across the broader societies in which they operate,” he said.

Policymakers also play a role, he added, for instance, with support for childcare or through tax policies that could encourage women from working full time.

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