Only 13% of investment companies have a female as a named fund manager, leading industry figures to deride asset managers and call for action, including intervention by boards.

Analysis of Numis Securities data shows 46 of 353 closed-end funds are run by women, who have control of just 7.5% of £305.7bn assets. 

The majority of roles filled by women are in a co-manager or deputy capacity, with just six solely in charge, compared to 149 trusts run by one man.

These figures echo those in the open-ended world. This week the Citywire Alpha Female Report 2023 revealed just 12.1% of portfolio managers in the global Citywire database are female.

Elisabeth Scott, chair of the Association of Investment Companies (AIC), said it was evident asset managers ‘are failing’.

‘It’s terribly disappointing that so many parts of our world have improved markedly and this, which is so visible, shows the asset management industry hasn’t,’ she commented.

‘There is no question of commitment, but they just don’t seem to be able’.

Genevra Banszky von Ambroz, partner and co-manager of Evelyn Partner’s active managed portfolio service, which invests in investment trusts, said in her experience there has been a ‘general improvement’ in diversity as initiatives embed but ‘that should not take away from the fact that there are very few ultimate decision-makers who are female’.

Banszky Von Ambroz, who has been in the investment sector for 15 years, added that she was not ‘remotely surprised’ by the findings but ‘the headline numbers are pretty shocking given the breadth of evidence which suggests that the inclusion of women as well as improvements in cognitive diversity more generally, tends to result in better outcomes.’

Several top performers within the investment trust sectors involve women. The £1.1bn Law Debenture (LWDB ), a UK equity income trust, jointly run by Janus Henderson’s Laura Foll and James Henderson, is the top performer in its competitive sector across five years. It has generated a total underlying return of 46.9% compared to the Numis sector average of 23.9%. Shareholders have fared even better with 64% returns, compared to the sector’s 24.2% average.

Another top performer is the £158.7m AEW UK Reit (AEWU ), run by Laura Elkin. The UK commercial property trust’s returns outstrip its peers by a long shot with 63.5% net asset value return over five years, with the next best trust, Picton Property Income (PCTN ), returning 27.5% and an industry average of 11.8%.

Digging deeper

The figures reveal there are certain pinch points within the investment company market when it comes to diversity.

At an asset class level equity trusts are far more likely to have women included on their manager list, with 37 of the 195 trusts in Numis’ equity sectors. The best sector for this is North American Equity where three of seven of the London-listed funds have at least one woman involved. The worst equity sectors are Emerging Markets and Europe, each of which have just one company.

Diversity is sparse in the alternatives sectors, with no females involved in debt companies and hedge funds, just one in specialist alternatives and two in the infrastructure, property and private equity sectors. 

Diversity by asset class

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Asset class	No. of investment companies	% female fund managers	% assets run by female managers
Global Equities	47	15%	7%
UK Equities	56	21%	15%
European Equities	11	9%	6%
North American Equities	7	43%	69%
Japanese Equities	11	27%	31%
Asia Pacific Equities	28	25%	17%
Emerging Market Equities	15	7%	3.5%
Specialist Equities	20	15%	15%
Specialist Alternatives	19	5%	13%
Infrastructure	32	6%	2%
Property	34	6%	1%
Private Equity	33	3%	6%
Private Equity Non UK Listed	12	8%	11%
Debt	36	3%	1%
Hedge Funds	10	0%	0%

 Source: Numis, Citywire

Analysis also shows asset managers that have a substantial stable of investment trusts have a higher proportion than the average. Abrdn comes out best with nine of its 20 trusts, 45%, include at least one woman, such as Harry Nimmo’s former flagship Abrdn UK Smaller Companies Growth (AUSC ) now jointly run by Abby Glennie and Amanda Yeaman Nimmo’s retirement.

Invesco is the worst with just one of seven. That is Invesco Asia (IAT ) where Fiona Yang works with lead manager Ian Hargreaves . Invesco declined to comment.

Large asset managers’ diversity

Asset manager	No. of trusts	% including a woman
Abrdn	20	45%
Baillie Gifford	13	38%
JP Morgan AM	18	39%
Janus Henderson	12	33%
Schroders*	14	21%
Invesco	7	14%

 Source: Numis, Citywire *Does not include International Biotechnology Trust which is in the process of moving to Schroders.

Intervention required

While industry participants think change needs to happen within the asset management companies themselves, particularly around culture and parental leave, they also think the unique structure of investment companies can help push the dial.

Scott, who is chair of India Capital Growth fund (IGC ) and JPMorgan Global Emerging Markets Income trust (JEMI ) and a non-executive director of Allianz Technology Trust (ATT ), said there was a role for boards in applying pressure to their investment managers.

While it’s not formally part of a board’s remit, Scott said, they can still influence decisions and there are certain times when it is appropriate to bring up diversity policies. For instance, when a fund manager is changing, or there are discussions of succession planning.

‘That is part of the role of the board to at least agree [with the proposals],’ she said. ‘You can say to the fund management of the company, why am I not seeing a woman on the short list?’

None of the companies that Scott is a part of has a female fund manager and she said this and the overall figures are ‘a source of question and reflection’.

Along with pressure from boards, there also needs to be industry-wide initiatives, according to Annabel Brodie-Smith, an ambassador for the Diversity Project and communications director at the AIC. She highlighted that quotas and targets have helped at diversity at a board level, with females making up 40% of investment company directors.

‘There has been no equivalent initiative to ‘redress the gender balance in fund management,’ she said.

However, Brodie-Smith added the Diversity Project’s Female Fund Programme, which is aiming for 20% female fund managers by 2026, ‘is an important step in the right direction’.

Ultimately though Banszky Von Ambroz said it is ‘difficult to overlook’ that many women still need to pick between being a mother and having a career in what is a ‘heavily male dominated, relatively inflexible industry’.

‘Until this changes, candidate pools are likely to always be light on female candidates with comparable levels of experience and expertise,’ she added. ‘There are some incredibly impressive female fund managers within our industry; I wish there were more!’

You can read the full Citywire Alpha Female 2023 report here.

 

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