Overheard at the Women’s Alternative Investment Summit in New York

11/13/18 12:24 PM

In the investment management industry, it is still relatively rare to sit in a meeting where there are a majority of women in the room. As such, we were absolutely delighted to join a large ballroom packed full of senior women alternative investment professionals at the 10th Women’s Alternative Investment Summit in New York. Perspectives across asset classes were well represented at this conference, as were both sides of the due diligence desk. The breakout sessions gave a wide variety of options, and until we find the artificial intelligence solution to attend all concurrent sessions simultaneously (i.e. how do I get a clone?), we are limited to gleaning just a few highlights:

  • Are you getting your fair money’s worth?: Some themes never get old: fees are always under review. There is general consensus that “2 & 20” is a myth in this day where there are so many permutations around fee structures. Investors continue to be sensitive to fees, and are looking for high integrity partners who are interested in sharing profits fairly. Some investors are agnostic to higher performance fees and certain types of pass-throughs. The focus is squarely on whether the fees are ultimately deemed to be “fair” and appropriate for the size of the manager, and whether the net returns reflect expectations for the strategy and the risk taken. Many investors agree that they are more willing to agree to fee structures for emerging managers (“so they can keep the lights on”) that they would not accept for larger, established firms. Now more than ever, getting the fee structure right is more of an art than a science. 
  • The “Weworkificationalization” of real estate: Demographics matter. Millennials are very demanding with respect to amenities (read: technology-enabled, non-traditional living and work spaces) and proximity. Firms like Wework have raised the bar for expectations and others must follow suit to compete. Housing must be close to work, close to play, and impressive: technology must be in the forefront, and both housing / work spaces must be places where people want to spend time. By the way, seniors are also driving demand (albeit perhaps less “high tech” for the moment) and a key theme rings clear across demographics no matter how these shift over time: it has to be affordable… Now, how are we set for the inevitable downturn? 
  • Artificial intelligence: Human involvement and judgment patterns will always play a key role in making better informed decisions. Curation by humans will always be needed – AI is changing the kinds of tasks we do, and we see at the same time that it is elevating the tier of work that humans can and will do in the future. Oh and by the way, it would be great to see computer science included as a mandatory field of study for all school children so that everyone has an equal opportunity to see if they are interested in pursuing coding, with the aim to increase diversity in the space over time. There was a shout out to organizations such as Girls Who Code, a non-profit dedicated to closing the gender gap in technology. 
  • Disruptors: Every conference seems to have sessions on crypto and blockchain nowadays, and while we agree that these are important technological disruptors, discussions across multiple panels brought concepts and questions to the forefront. How do we think about new technologies? How do we think about privacy? How are current business models going to change? How do we engage with regulators? New technologies should bring ethical designs to play, not just those focused on the letter of current laws, but those driving benefits to make our world a better place, while promoting secure transactions and protecting privacy. Disruption is not only about the technology. We have seen millennials driving significant changes in their own right to the workplace (culture and physical layout) with their focus on values and strong push to make a positive impact to the world around them. 
  • Women in investment management and success: Yes, there is still a glass ceiling. Yes, in the workplace, we still notice when no questions are directed to the women in the room, and when the questions directed to the women in the room are responded to by men. We heard some recurring themes across several panels and some revealing statistics: for example, 60% of most investment management firms have few or no senior women, and less than 10% of private equity managers have senior women on their investment teams. Some firms remain behind far the curve, scrambling to “find” women to hire because at the end of the day, “like hires like.” There is general agreement that investment management is still a very challenging industry for women where “she is direct and has convictions about her views” still translates in some shops as “she’s aggressive”. Some stories we heard indicate that the firms who were earlier adopters of diversity hiring quotas have achieved a far higher degree of success in becoming a welcoming place for women to grow in their careers. More than ever, an organization’s culture is important: women want to work where women’s initiatives are more than just lip service - “The tone comes from the top down”. The firms with a great work environment are those that have learned to understand the needs of all of their employees, and accommodate the important moments in employees’ lives. A great place to start is by asking the women in your workplace how you as an employer can help them be successful, and to proactively provide opportunities for women to be successful.

Many thanks again to the organizers for another successful and very inspiring event! We are already looking forward to the next Women’s Alternative Investment Summit.

Subscribe by Email