July, 2016 – With Hillary Clinton poised to clinch the Democratic Party nomination, there is a real chance that a woman could finally make it to the oval office in January 2017. But while a woman may finally break through the ultimate glass ceiling, and women are now the primary breadwinners in 40% of households with children, it appears that discrimination against women on Wall Street and within the alternative investment community remains as prevalent as ever. The New York Hedge Fund Roundtable recently surveyed its membership about the topic of women and inequality within the alternative investment industry and whether things have changed in the 12 years since a major wirehouse paid a $54 million settlement to a group of former female employees who alleged that they had been discriminated against at the firm.
Women and inequality on Wall Street and within the alternative investment industry was the topic of the Roundtable’s June event, where author Maureen Sherry, formerly one of the youngest managing directors at Bear Stearns, discussed her new novel “Opening Belle.” Sherry’s novel, a fictional account of a female Wall Street executive who makes an effort to initiate change at her male dominated investment firm, was heavily inspired by her own experience as a senior woman within a male dominated industry.
During her days at Bear Stearns, Sherry said a pattern emerged where women repeatedly left the firm after three years because they didn’t like the environment –many of them filing discrimination complaints on their way out. “I kept thinking ‘I would really like to tell this story,’” Sherry told attendees at the Roundtable’s June event. “Much has changed and much has not changed,” she said. “What women today tell me is that there’s almost this unconscious bias… when the big money decisions are happening, men just prefer to work with people who look like them.”
Roundtable members believe discrimination against women remains an ongoing problem within the alternative investment industry. When asked whether women in the industry have the same chance of succeeding as men do, 80% of respondents said they believe few women get the chance to prove their capabilities because of deep rooted beliefs among upper management that women will ultimately choose their families over their careers. Only 20% of respondents believe that Wall Street’s efforts to eliminate sexism have been successful and that the playing field between men and women is becoming more level.
“While there have been some definite inroads made in the way that women on Wall Street and in the alternative investment community are treated and the opportunities afforded them, there remains a conscious belief that there is still room for improvement. Openly discussing issues like this will hopefully contribute to a desired atmosphere of equality where no one feels unfairly treated based on gender or other non-substantive differences” said Timothy P. Selby, President of the New York Hedge Fund Roundtable and a partner at Alston & Bird.
“Ms. Sherry touched an important and critical issue that in today’s environment, if given proper focus and seriousness by management, there is a real ability to accelerate the pace of change in the investment community. A key argument that Ms. Sherry made is that a diversity of backgrounds (gender, race, etc.) of key decision makers might help make better decisions and so it could be good for business as well as a societal goal,” said Adam Weinstein, President-Elect of the New York Hedge Fund Roundtable and a managing director at New Mountain Capital.
New York Hedge Fund Roundtable members had the opportunity to weigh in on this topic both at the Roundtable’s June event as well as through an online electronic poll.
*Of the respondents to this survey, 29% were fund managers; 10% were allocators; 10% were risk management or trading; 41% were service providers; and 10% were other industry participants.
Following are some of the other key findings of that survey:
- Asked whether sexism on Wall Street and within the alternative investment industry has diminished in recent years, 54% of respondents believe that sexism is as prevalent as ever but that it is just not as overt as it once was; 46% of respondents believe that due to increased attention regarding sexism and major efforts by firms to ensure that it is a thing of the past, sexism has become significantly less prevalent in recent years.
- When asked why there are so few women in the alternative investment arena and why the majority of women in the industry are in investor relations and media relations positions, 43% of respondents said there is still a widespread belief that most women will ultimately abandon their careers once they have children, or that they are not as aggressive and capable as their male colleagues; 36% think many women are still turned off by the male dominance of the industry; and 21% think that there are fewer qualified women looking to enter the industry than there are qualified men.
- 63% of respondents said their firms are making an effort to recruit more women and to help women move into more senior roles, while 37% said their firms aren’t making any special effort to recruit women or help them advance.
- When asked why there has been a significant decline in the number of discrimination cases in the news in recent years, 62% of respondents said they think that high profile settlements in discrimination cases like the one paid by a major wirehouse have made firms much more proactive about educating employees about discrimination and enforcing zero tolerance policies; while 38% of respondents think the fact that most firms include mandatory arbitration clauses within new hire agreements essentially acts as a gag for whistleblowers has artificially kept the number of discrimination suits down.
- Asked why there is still a big difference in the amount that women and men earn within identical roles, 59% of respondents said that, regardless of performance, preconceived notions of men being superior within finance remain commonplace and have kept women’s salaries unnaturally low; while 41% think the difference is due to the fact that women tend to be less comfortable talking about money than their male counterparts and do not push as hard for higher salaries commensurate with their contributions to their firms.
June’s “bonus” question: With both the Democratic Party and Republican Party conventions drawing near, Roundtable members were asked what the odds are that Hillary Clinton and Donald Trump will not be the two candidates on the ballots in November. 67% of respondents believe that, like it or not, Hillary and Donald will be the two candidates on the ballot; 22% think that if publicity around these two candidates gets any worse their respective parties may well surprise everyone and choose to back alternate candidates; and 11% think that while it is a given Hillary and Donald will be on the ballots there is also a very good chance that an independent party nominee could become a real contender.
About The New York Hedge Fund Roundtable:
The New York Hedge Fund Roundtable is a non-profit organization focused on promoting ethics and best practices within the alternative investment industry. The membership consists of investors, fund managers and other industry professionals who regularly meet to discuss current issues within the industry and connect with peers. Monthly events center around thought-provoking speakers and panels designed to keep members apprised of timely and important issues within the alternative investment industry. The Roundtable’s goal is to provide a forum for thought leadership, where industry professional have the opportunity to enhance their knowledge and skills and to network with other individuals committed to advancing the industry with the highest ethical standards. For additional information about the Roundtable, visit: http://www.nyhfr.org
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