Despite being confronted with travel delays and more than a few technological challenges, Sallie Krawcheck delivered the opening address via phone at the Asset Manager Showcase in Boston, Mass., earlier this week.

The event, sponsored by Financial Advisor and Private Wealth magazines, is one of a regional series designed to create efficient one-on-one dialogue between advisory professionals and portfolio managers.
Krawcheck, known for her Wall Street acumen and high-profile stints at Merrill Lynch and Smith Barney, is the new owner of Ellevate Network (formerly 85 Broads) and the newly created Ellevate Asset Management. Her goal with both organizations is to promote diversity of thinking and approach across the spectrum of networking, career-pathing, business management and decision-making. She’s not the first to recognize that financial services is a largely homogenous environment that can be fraught with a problem she refers to as “group think.” She is, however, one of the few who has taken steps to identify potential solutions to the problem and alternatives to the traditional methods that are ingrained in many large organizations.
Dating back to her days as a research analyst at Sanford Bernstein, Krawcheck learned to evaluate companies on key fundamentals that included the strength of their management teams. In trying to understand why some teams outperform and others are less functional, she saw evidence that “diverse teams are associated with higher performance” and that “diverse teams outperform smarter, more capable teams.”
Ellevate Asset Management, in partnership with specialty investment firm PAX World Management, has launched the PAX Ellevate Global Women’s Index Fund to invest in companies with a higher concentration of women on their governance boards and in senior management positions. One of the notable patterns they’ve identified is that companies meeting their selection criteria have a higher ROE and a lower beta than the MSCI index, indicating that a more diverse composition of leaders can have a very attractive effective on the risk-reward dynamic.
More broadly, Krawcheck is committed to promoting gender diversity and the advancement of women, which she aims to do with the help of the burgeoning Ellevate Network. The professional networking organization now has tens of thousands of members in more than 40 major cities around the globe. Membership growth has been explosive since the network was rebranded and relaunched earlier this year, a strong signal that professional women are eager to meet and engage with a broad cross-section of other professional women in ways that can encourage learning, growth and collaboration.
Krawcheck’s own experiences showed her that even “loose connections can result in opportunity,” sharing a six-degrees-of-separation story that linked a chance encounter early in her career with former SEC chairman Arthur Levitt to landing one of her first major executive roles. As she persuasively concluded, “who you know is what you know.”