Want Better Hedge Fund Returns? Try One Led By A Woman
Want Better Hedge Fund Returns? Try One Led by a Woman
DealBook, January 15th, 2014
By William Alden
In the world of hedge funds, a relative few have a woman at the helm. And yet, these funds may be the standouts from the bunch, a new report argues.
In the years since the financial crisis, hedge funds managed by women performed better than a broader index that reflects the performance of the industry, according to a report released on Wednesday by the professional services firm Rothstein Kass. The report seeks to show that this “alpha” – superior returns, in Wall Street speak – is no mere fluke.
“There is meaningful alpha to be gained from investing in women-owned and -managed funds,” Meredith Jones, a director at Rothstein Kass who wrote the report, said in an interview. “There appear to be both behavioral and biological factors that impact women’s ability to manage money and make them consistent.”
From the beginning of 2007 through June 2013 – a period that includes the dark days of the crisis – a Rothstein Kass index of women-run hedge funds returned 6 percent, the report says. By comparison, the HFRX Global Hedge Fund Index, released by Hedge Fund Research, fell 1.1 percent during that time, according to the report.
Last year through November, the index of women-run funds had a 9.8 percent return, compared with a 6.13 percent rise in the broader index, the research showed. (Still, both indexes fell short of the Standard & Poor’s 500-stock index, which rose about 27 percent during that time.)
The report, titled “Women in Alternative Investments: A Marathon, Not a Sprint,” used a group of 82 hedge funds managed or owned by women. Last year, the firm said that female hedge fund managers produced a return of 8.95 percent through the third quarter of 2012, compared with a 2.69 percent net return for the broader index.
While highlighting the accomplishments of women in hedge funds, private equity and venture capital, this year’s report also draws attention to persistent gender disparities on Wall Street.
The research, based on a survey in September and October of 440 senior women in the alternative investments business, suggests that the vast majority of the top jobs are held by men. Of the women surveyed, only 15.5 percent said their firm was owned or managed by a woman. Among hedge funds in particular, 21.4 percent were owned or managed by women.
About 42 percent of the respondents said their firm had no general partners who were women. And nearly 40 percent of the firms included in the survey had no women on their investment committees.
In that context, hedge funds run by women remain something of a niche. Some institutional investors, like public pension funds, have a specific mandate to invest a portion of their money in funds run by women or minorities.
Though these mandates can be motivated by political factors, Rothstein Kass is seeking to show that investing with women managers can be a wise choice for purely financial reasons. A handful of studies have suggested that women traders behave differently than their male counterparts, acting less impulsively.
John Coates, a former trader who is now a research fellow in neuroscience at the University of Cambridge, argued in a 2012 book, “The Hour Between Dog and Wolf,” that testosterone contributed to market swings. Hiring more women on trading floors, he wrote, might have a stabilizing effect.
But these ideas are far from mainstream, and the industry has been slow to change. A fourth of investors surveyed by Rothstein Kass said they expected their allocations to women-run funds to increase “somewhat” in 2014, while 2 percent expected to allocate “significantly” more money.
Though the study expected more women to start their own funds in the coming years, the scarcity of such funds is itself an obstacle, a “chicken or the egg” problem, said Kelly Easterling, an audit principal at Rothstein Kass who contributed to the report.
“Without a large supply of funds, it’s difficult to achieve appropriate portfolio diversification or, for that matter, put enough money to work to move the performance dial,” she said in a statement quoted in the report. “On the other hand, until there is more money flowing to women-owned and -managed funds, it’s unlikely that there will be a stampede of new fund launches.”
More Posts from Investmentsandequity-blog and Others
3 early investors in Twitter will make 2x their entire FUND on Twitter IPO
These are some insane numbers to think about: (nearly) all 3 of the firms who invested in Twitter early on will make 2x their entire FUND in returns on the Twitter IPO. Talk about a bet paying off big time. Comment on this post and others you love. Finally, comments on Tumblr posts! Learn how. Posted by Patrick Hannigan.
The Kenyan middle class is an emerging demographic in need of hospitality and food services. Hellofood is a business venture originating out of Berlin’s Rocket Internet e-business incubator. The business has grown to several countries including Ghana, Senegal and Morocco.
“You need to...
THE MYTH THAT “MINORITIES” GET MORE SCHOLARSHIPS DEBUNKED SINCE 5EVER
This is something that comes up time and time again like clockwork.Here’s a”just the facts” post.
Racists LOVE this tired old saw. The problem is that it’s complete and utter bullshit, it always HAS been, and IT IS THE OPPOSITE OF REALITY.
Caucasian students receive more than three-quarters (76%) of all institutional merit-based scholarship and grant funding, even though they represent less than two-thirds (62%) of the student population. Caucasian students are 40% more likely to win private scholarships than minority students. These statistics demonstrate that, as a whole, private sector scholarship programs tend to perpetuate historical inequities in the distribution of scholarships according to race.
-The Distribution of Grants and Scholarships by Race
BUT WHAT ABOUT FINANCIAL NEED BASED SCHOLARSHIPS????
OH HEY IS THERE ANOTHER SOURCE FOR THIS?
It debunks the race myth, which claims that minority students receive more than their fair share of scholarships. The reality is that minority students are less likely to win private scholarships or receive merit-based institutional grants than Caucasian students. Among undergraduate students enrolled full-time/full-year in Bachelor’s degree programs at four-year colleges and universities, minority students represent about a third of applicants but slightly more than a quarter of private scholarship recipients. Caucasian students receive more than three-quarters (76%) of all institutional merit-based scholarship and grant funding, even though they represent less than two-thirds (62%) of the student population. Caucasian students are 40% more likely to win private scholarships than minority students.
STOP PARROTING RACIST MYTHS INSTEAD OF ACTUALLY FACT CHECKING
Scholarships Go Disproportionately To White Students
White Students More Likely To Win Scholarships
White students get Minority Scholarships
Texas State Offers Scholarship EXCLUSIVELY FOR WHITE PEOPLE
One Million dollars’ Worth of White “Ethnic” Scholarships Don’t Trouble Student Group Protesting “Minority Scholarships
B-b-but what about the “Evils” Of Affirmative Action in Higher Education??? Oh yeah, WHITE WOMEN ARE THE #1 BENEFICIARIES OF AFFIRMATIVE ACTION.
So stop saying this shit. you’re just plain fucking WRONG. Also, racist.
Obamacare Band-Aid: President to allow insurers to keep health plans an extra year
(Photo: Mandel Ngan / AFP - Getty Images)
After a furor over canceled health policies, president announces adjustment allowing insurers to offer the option to renew their 2013 plans in 2014 without change.
Continue reading
$NFLX reverses course after big gain following earnings. Reed Hastings during earnings videocast: ““Every time I read a story about Netflix is the highest appreciating stock in the S&P 500, it worries me because that was the exact headline that we used to see in 2003.” http://yhoo.it/1deOhGo
Canadian Solar Inc. (NASDAQ:CSIQ) has run into a major double top from 2010. This is a classic swing trade short as a pull back is now expected. The s…
Canadian Solar Inc. (NASDAQ:CSIQ) has run into a major double top from 2010. This is a classic swing trade short as a pull back is now expected. The stock has run from $1.95 to $33.25 in less than a year. This is an epic move of 1600%. A likely pull back target would be $26.00. Gareth Soloway InTheMoneyStocks.com
Lazard Earnings Rise 75%
Kenneth M. Jacobs, Lazard CEO
Earnings have risen 75% on deals and cost cutting. The firm reported it earned $62 million in adjusted profit for the quarter. This amounts to 46 cents a share. They reported a 10% rise in operational revenue to $489 million.
Dealbook also reported Lazard had increased in profits last quarter as well.
This is a review of the weeks news in the financial market as well as tips for investing and managing your financial assets.
134 posts