If senior women in investment banking are a relative rarity, finding them in hedge funds and private equity firms is near impossible. This is despite the fact that funds run by women invariably perform better than those run by men - maybe because those women have had to claw their way up and prove themselves better than their male counterparts at every turn.
In a new book, 'Women of the Street', Meredith A. Jones conducts in-depth interviews with senior women in the alternative investment space to shed some light on how they got where they are today. Here are her lessons for other women who want to make it on the buy-side.
For all the huff and puff around diversity, the number of women dropping out of financial services shortly after starting is disproportionate to the number of men quitting. Sonya Brown, general partner at Norwest Venture Partners, started out in the analyst class at Bear Stearns.
“We started as 50/50, or maybe 60/40, male/female at that time. I would tell you that by the end of my second year, my analyst class had only three women out of a 60-person analyst class,” she said.
One commonality among the women at the top in alternative investments is that most didn’t set out for a career in finance. Brown said she majored in TV and radio and had every intention of going into the media until she was encouraged across to an interview at Bear Stearns and Morgan Stanley by a professor at college.
Leah Zell, founder and principal, Lizard Investors, studied European history at Harvard and was originally set on a career in academia: “As I got closer and closer to becoming an academic as a profession, I began to explore other options…As I was doing my PhD research in the archives in Germany, I got locked into one archive by myself for hours, and I said ‘is this really how I want to spend my life?’”
Meanwhile, Fran Tuite, portfolio manager, RMB Capital Management said she was set on becoming a doctor or veterinarian until an aptitude test revealed a strong finance and accounting ability, prompting her to switch her major.
When questioned on the gender divide, most women recognised that they were in the minority, but didn’t focus on it as an impediment. Olga Chernova, managing principal and chief investment office at Sancus Capital Management, said that growing up in communist Russia meant that she was “completely free of any gender bias”.
“I found this very helpful and liberating,” she said. “When I worked at Goldman or J.P. Morgan, I knew there were not many women, but I never even paused to consider why.”
“I never even thought twice about it when I got into it,” said Tuite. “It was only later, going out to conferences where I was interacting more, that I realized that there were no women here. These conferences, you’d be lucky if there were one or two women out of a thousand people there.”
Tuite’s first career move was into corporate finance at Procter & Gamble, something she fairly quickly realised wasn’t for her. Despite the finance degree, she went back to school to do an MBA, a CPA and a CFA designation “all at the same time” in order to secure her first job in investment.
One obvious fact about working in finance is that the hours are long and most employers are not overly forgiving when it comes to childcare arrangements. This may be changing slightly, but most senior women have had to combine kids with their careers – and it’s not easy.
“I did a lot of travelling, but would try hard to take the last flight out on Sunday night so I could put my kids to bed,” said Zell. “I would always try to be back for Friday afternoon. I knew every single flight schedule to Europe by heart.”
Marjorie Hogan, portfolio manager and managing member at Altum Capital, has four children and said she “waddled into” her job at Bear Stearns two weeks away from giving birth to her third. Eventually, her husband took over childcare duties, but when setting up Altum, it was a tough gig.
“We worked seven days a week, roughly 18-hour days,” she said. “I would go home and, after the kids had dinner and bedtime stories, go back in.”
A lot of academic research suggests women are more risk-averse than men, but when it comes to career decisions, many senior women in alternatives have had to take a chance.
When Tuite took her first hedge fund job, she said that “I didn’t know anything about hedge funds. I walked into working for a very eccentric man who smoked cigars in his office every afternoon.”
Dr Fariba Fischel Ghodsian, chief investment officer, DAFNA Capital Management started out as a chemical engineer and worked in biotech for years before moving into a biotech analyst role at an investment bank in 1994. Not only was she the first biotech analyst at this bank, there were “not many biotech analysts at all” across the entire finance industry. It was a gamble.
“Developing a career is tentatively taking a risk and then seeing whether you get rewarded for taking that risk – or whether you get shut down,” said Zell from Lizard Investors.
This is less about what you can learn from them and more gaining the confidence to make the right decisions.
“Mentoring is less somebody consciously teaching you things as it is being in their wake,” said Zell. “You learn less by what people tell you than by what they do, and patterning yourself against them.”
“I wasn’t looking for a mentor, but I found them or they found me. You never know how exactly that works,” said Tuite. “I think the real importance of a mentor is really just allowing you to believe in yourself. Not necessarily teaching yourself anything specifically, but teaching you that you’re good enough, smart enough.”