KPMG has released its fifth Women in Alternative Investments Report.
This WAI, like its four precursors, “showcases the investment insights of women in alternatives while fostering a conversation about the unique issues facing women in the industry.”
Camille Asaro and Kelly Rau, Alternative Investments, KPMG, kick off the report with their personal reflection. They say that the first of these reports appeared at a moment, 2011, when “discussion of the topic of women’s advancement” occurred solely among women, “in small settings and relegated to the sidelines.” They are happy to perceive that this is no longer the case.
Key themes of the report this year include the following:
- There has been a dramatic increase in the percentage of women owned or managed programs or mandates. That figure reached 10% this year – from just 2% in 2012.
- There is optimism within that 10%: as many as 28% of the women owned or managed funds in the survey said that they expect to grow their fund beyond $1 billion in assets under management.
- Efforts underway will increase the size of the pipeline bringing new women into decision making positions in the alt-invests world.
The report quotes Kate Mitchell, co-founder of Scale Venture Partners: “We are no longer making the business case about why diversity is important – we are now talking about what we can do to change the numbers.”
There are high profile pension funds, such as the New York City Retirement System and the Netherlands’ APG, that nowadays are specifically looking for gender balance among the general partners of funds into which they may make allocations.
In a development that may be of great importance to the aforementioned pipeline, emerging manager programs are becoming more common. Forty-one percent of the investors responding for this year’s survey have an EM program or fund, in contrast to just 33% last year.
Thirty two percent if investor respondents say that they will increase their allocations to EM over the next 18 months.
When one says that this “may be” of importance to the cause of WAI, that is an important qualification, because at this time only 16% of the investor respondents expect that their allocations to women owned or managed funds will increase over that same 18 month time frame. This is down from the 26% who expected such an increase a year before. So expectations for allocation to women owned finds are going in one direction while expectations for allocations to emerging managers are going in the other.
In previous years, the WAI survey has looked to North American respondents specifically. This year it went global, though the sample remains dominated by North America, where one finds the work location of 75% thereof. Another 11% of respondents will be found in the UK, 6% in Europe (ex UK), 5% in the Asian/Pacific region, 2% in Latin America, and 1% in the Middle East/Africa.
The North American focus of the respondents’ investments is even more marked than the North American focus of their workspace. Eighty one percent of investor respondents have portfolios that are heavily concentrated in North America.
Of course many of the 75% headquartered in North America have a global presence. More than half have offices in the UK. Slightly less than half have offices in Europe ex-UK, etc.
Investment Committee Membership
The survey found that at two-thirds of the funds responding to questions, women constituted 10% or more of the membership of investment committees. Now that the WAI is global, we can expand this point: how does that criterion, investment committee participation, break down by region?
It is still the case that many funds have no women (0%) on the investment committee. This is true of 44% of the respondent funds of North America, though of only 24% of the funds of Europe (including the UK).
In North America, too, 37% of funds have some positive number of women on the committee, but they represent no more than one quarter of that committee. This is true for 51% of Europe (inc. UK) funds, and for 21% of those of the rest of the world.
The report concludes with seize-the-moment optimism. “Change is upon us. It is up to us to capitalize on it.”