“The notion that there’s not enough talent, to me, is very insulting,” said Sue Toigo, co-founder of the Robert Toigo Foundation, a non-profit that works on the placement and advancement of minority MBA holders in the finance industry.
“It simply means people are lazy,” she said. “They haven’t taken the time to look for it.”
Toigo said that hedge fund investors could add pressure by seeking out diverse leadership teams, for example.
That view was echoed by Robert L. Greene, chief executive of the National Association of Investment Companies, a network of more than 100 minority-owned hedge funds and private equity firms representing over $175 billion in assets under management.
“Diversity doesn’t just happen,” he said. “Society is naturally diverse, but selection isn’t. You need to show intention.”
Some on the client side have started to take action. Cambridge Associates is seeking to double its investments in minority managers, adding $20 billion in allocations.
A few hedge funds have changed the make-up of their senior ranks. When Stephen Mandel stepped back from his Lone Pine Capital, for example, he left the portfolio in the hands of a three-person team, two of whom are women, including one of South Asian origin.
While most firms declined to share data, two of the industry’s biggest, Point72 Asset Management and Bridgewater Associates, did provide figures.
About 40% of U.S. staff at Point72 and their training Academy were diverse in 2019 -- that includes investing and non-investing roles of women, and people of color, including the industry’s better-represented Asian and South Asian populations.
“Our ability to succeed is dependent on employing people who see things other people miss and recognize developments other people do not,” spokeswoman Tiffany Galvin-Cohen said in an email.
At Bridgewater, about one in four investing roles is held by a minority, and nearly one in five is a woman. The firm is “looking to build on our existing diversity and inclusion efforts, and expand them where relevant,” spokeswoman Ryan FitzGibbon said.
On Monday, Bloomberg reported that Bridgewater reached a settlement with former co-Chief Executive Officer Eileen Murray over her exit package. The two sides had been negotiating for months, a fight that dragged on because the firm’s offer was less than what has been paid to men who left the company and below the status of her position, according to one of Murray’s advisers.
Sexist Challenge
In an industry that’s so dominated by white men, women face a very specific bias, said Svetlana Lee, who ran Varna Capital.
“Everyone worries about what happens when a woman has children,” said Lee. While her former bosses, who include industry titans Richard Perry, Seth Klarman and David Einhorn, were supportive mentors, she said there is an industry-wide problem: some recruiters view women as “an open risk factor.”
Fewer than one in five employees at hedge funds globally are female, according to research firm Preqin.
Rashad Robinson, president of racial justice organization Color of Change, said that for the hedge fund world to make real progress firms should consider linking financial incentives to hiring and retaining a diverse workforce.
“When money comes into play, people get creative,” he said.
--With assistance from Sridhar Natarajan, Katherine Burton and Alan Mirabella.
This article was provided by Bloomberg News.