Women Led Investment Funds Continue to Outperform Industry, But Struggle to Raise Capital

WWR Staff

KPMG LLP, the U.S. audit, tax and advisory firm, today issued the 2015 Women in Alternative Investments Report: Breaking Away, The Path Forward for Women in Alternatives, which found that women-owned or managed funds are making little progress in attracting capital, despite continually outperforming the industry. In addition, 72 percent of investors polled said the lack of supply of talent is the greatest barrier to allocating capital to women-owned or managed funds.

The KPMG report, comprised of a survey and interviews with more than 300 female alternative investment fund managers, investors and other professionals, found that the majority of respondents believe it is harder for women-owned or managed funds to raise capital.

“This year’s report demonstrates that many industry professionals believe women led funds lack investor access and visibility despite better performance than the industry,” said Kelly Easterling, KPMG Audit partner and co-author of this year’s report.
“But women are not asking for special treatment, they want to be held to the same standards as their peers, whether male or female.”

The KPMG report also includes a new index created by HFR, a global leader in indexation and analysis of hedge fund performance. The HFRI Women Index tracks women-owned and managed funds and/or firms and how they perform against the overall hedge fund industry. The HFRI Women Index revealed that women-owned and managed hedge funds have outperformed the hedge fund sector nearly every year since 2007.

“There are a lot of excellent women out there who warrant capital and already have proven performance. But, there’s a dearth of women being developed through the talent pipeline,” said Kate Mitchell co-founder and partner with Scale Venture Partners, who participated in the study. ” If firms proactively compiled diverse candidate slates to interview, we could really move the needle. Not only will this benefit diversity but we’ll increase the pipeline of great candidates,” Mitchell noted.

This year’s survey looked at the impact that mandates might have on women-owned and managed funds. One-third of investor respondents have an emerging manager program or fund and 7 percent of investors have mandates specifically for women-owned or managed funds. Despite the existence of emerging manager or women-owned/managed mandates, those funds represent a small portion of surveyed investors’ portfolios, with 67 percent of investors allocating one tenth or less to such funds.

Forty-three percent of those polled said they are uncertain whether the existence of mandates will increase the demand for women-owned and managed funds over the next 12 to 18 months. Investors were slightly more positive than fund respondents, with 38 percent believing mandates will increase demand, compared to fund respondents at 31 percent.

While many respondents agreed that mandates provide a good chance to build out the pool of experienced, institutional quality managers, many also voiced concern that outsiders may believe firms won mandates because they were women-led, rather than because they were a firm with strong returns.

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