26 BARRON’S March9,2020
Opportunity Commission.
Although women account for more
of the industry’s senior leaders, a
closer look shows that many are filling
corporate functions—humanre-
sources, general counsel, investor re-
lations—rather than the revenue-gen-
erating businesses that tend to be the
proving ground for roles like chief
executive or money manager.
“Those are good jobs. But if you
don’t touch the money, you are in a
different category,” says Nori Gerardo
Lietz, a veteran real-estate investor
and founder of real-estate advisory
firm Areté Capital. She also teaches at
Harvard Business School.
In an analysis by Equilar of the five
highest-paid positions at companies in
the Russell 3000 index, financial ser-
vices had less than 10% of women in
these roles—making it the third-worst
industry of 11, after energy and com-
munication services. Within finance,
banking has made the most progress:
Women account for 26% of the top
five highest-paid positions in that
subgroup, up from 11% in 2010.
Just 5% of S&P 500 index compa-
nies had a woman at the helm in 2019,
and corporate executive committees
were less gender diverse than in 2018,
according to a new report from Bank
of America.
In private markets, the percentage
of women in senior positions hasn’t
breached the midteens. Venture capi-
tal looks the best, with 13.4% of
women holding high positions, while
real estate looks the worst at 8.5%,
according to a Preqin study. A record
number of women—54—became part-
ners last year at venture-capital firms
with more than $25 million in assets,
though two-thirds of such firms still
don’t have even one female partner,
according to diversity and inclusion
nonprofit All Raise.
Those trends are reflected on the
other side of the equation, as well.
Last year, female-founded start-ups
attracted just 2.7% of venture capital,
according to PitchBook. Morgan Stan-
ley estimates that venture capital
could be leaving $4 trillion on the ta-
ble by not investing more in women-
and minority-owned businesses. More
women writing checks could make a
difference: Studies have shown that
women are twice as likely to invest in
companies with female founders and
three times as likely to allocate money
to firms with a female CEO.
In some instances, the situation has
worsened. Only 11% of U.S. fund man-
agers were women in 2019, below the
global average of 14% and worse than
the 13.9% in 2000, according to a new
report from Morningstar. The number
of funds has exploded over the past
two decades, but the net total of
women entering the industry has
stayed static, says Madison Sargis,
associate director of quantitative
research at Morningstar.
Coming into an industry with so
few women presents challenges.
Laura Geritz, a veteran fund manager
who founded female-owned Rondure
Global Advisors, says she was told
early in her career that she should act
more masculine in order to succeed.
“I had to adapt my personality over
the years to survive,” Geritz recalls. “I
even gamed my score on the Myers-
Briggs test so I would test the most
like a very dominant male chief invest-
ment officer at one of my past firms.”
As it stands, women manage just
1.6% of mutual-fund assets. That’s
despite numerous studies that have
shown their performance is no worse
than their male peers and, in some
instances, even better. For example, a
2016 paper co-authored by Northeast-
ern University professors Rajesh Ag-
Women In
Finance Are
Rising—At Last
The industry’s gender gap is narrowing as the
benefits of diversity become apparent.
Numerous
studies show
that more
women in
management
can produce
better
corporate
returns.
T
he members of the
inauguralBarron’s
100 Most Influen-
tial Women in U.S.
Finance list are
impressive for their
numerous achieve-
ments. But their accomplishments are
even more remarkable in an industry
that has been slow to fix the dearth of
women in powerful roles.
There has been some notable
change. Executives have made great
strides in acknowledging the problem.
Nearly every financial industry con-
ference features a panel on diversity
issues, with executives discussing
initiatives to move the needle. More
research is making the case for gender
diversity, and institutional investors,
such as pension funds, are keeping it
in mind as they allocate money.
That’s leading to some progress.
Women now account for 22% of corpo-
rate board members, twice the figure in
2000, according to Morningstar. Tiny
cracksare emerging in the male-domi-
nated club of venture capital, as some of
the biggest firms add female partners.
“There is more will when there are
more women,” Kristalina Georgieva,
the managing director of the Interna-
tional Monetary Fund, tellsBarron’s,
about the acceleration of progress.
The numbers, however, don’t yet live
up to the industry talk. As of 2018,
roughly 30% of senior officials and
managers in the finance and insurance
industries were women—roughly
31,000—up slightly from 29% five
years ago, according to the latest data
from the U.S. Equal Employment
By RESHMA KAPADIA
Hanna Barczyk