There was some indication that managers from poorer backgrounds had more concentrated portfolios and traded more, perhaps indicating that they take on more risk to try to overcome other disadvantages.
Small Sample Size
There are, of course, some caveats here. The study uses data from the 1940 census to establish family background and was very rigorous about being sure about matching the right fund manager.
That leads to a small sample size, 208, with a bias towards older managers. It is possible that the industry has become more meritocratic in recent years.
A 2015 study of hedge funds found that only 2.6 percent in the sample were managed exclusively by women and 4.6 percent name any women as managers, again resulting in a fairly small sample size. There were only 439 hedge funds identified with any women managers over the 20 years covered by the study, carried out by Rajesh Aggarwal and Nicole Boyson of Northeastern University. (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2726584)
Female-only funds do about as well as male-only funds, while mixed-sex teams seem to underperform both male- and female-only funds. What was striking was that among hedge funds that survive (and remember many hedge funds fail in the first few years), those with at least one female manager have better performance than male-managed surviving funds, despite having lower assets under management.
“Using media mentions as a proxy for investor interest, female-managed funds receive proportionately less attention. Our results suggest that there are no inherent differences in skill between female and male managers, but that only the best performing female managers manage to survive,” the authors write.
Among surviving hedge funds, those with female management had a buy-and-hold annual return of 7.52 percent against 6.69 percent for male firms. Female-run hedge funds also produced more risk-adjusted outperformance, doing better by about 0.60 percentage point annually.
Again, though the sample size is smaller than ideal, both studies seem to indicate a truth that is easy to imagine: that people who cross major boundaries, in this case of gender and economics, to pursue their careers face high hurdles.
That winnowing process only allows the best to get through.