Generous salary and juicy bonus? Check. Client meetings at private members’ club? Check. Swanky Mayfair office? Check. Company maternity scheme? Maybe, well get back to you.

In the competition for talent, the hedge fund industry still has an edge over many other areas of finance, except, it would seem, when it comes to employing women.

Just seven women were hired or promoted last year as investment executives at 20 of Britain’s top private hedge funds, the lowest level in at least a decade, according to a Reuters’ analysis of regulatory filings. They took on 82 men in that period.

Of all the places to work in hedge funds, the investment team is the most coveted. Portfolio managers or traders decide where to invest client money and are traditionally the highest-paid members of staff. Such roles are a launch pad for star managers to set up their own firms in the future, establishing the next generation of hedge funds.

In Britain, these roles are registered with the Financial Conduct Authority (FCA) under a category known as the ‘CF 30’ function, which also comprises senior marketing jobs.

The analysis of CF 30 filings for 76 financial firms showed hedge funds registered women at a fraction of the rate of other finance companies.

Hedge funds say they struggle to find women to work as portfolio managers and point out that women are better represented in other areas, including compliance and legal counsel. These are middle-office or back-office positions, rarely involved in investment calls.

People who work for or in financial services say more female candidates would emerge for trading positions if hedge funds cast the net wider for potential candidates, and offered better maternity packages and mentorships.

“Hedge funds will all say they don’t get female applicants but are they even looking for them? Do they care? The data suggests no they don’t,” said Yasmine Chinwala of think tank New Financial.

Unlike the rest of the financial sector where large, listed companies are now required to disclose pay gaps between men and women, and are under public pressure to have more women in senior roles, hedge funds can mostly operate below the radar.

Usually privately owned and run by their founders, they are not the target of government drives to improve female representation in finance.

“Public scrutiny and, more specifically, mandated government-backed scrutiny delivers results,” said Chinwala. “These sectors have shown they are not going to make significant changes themselves without a big, concerted, external push.”

Investing by numbers

Three of the 20 top British hedge funds covered in the analysis commented about their record of hiring women.

“We have women represented across all functional areas of the firm as well as in senior management positions which are not covered by CF 30 registrations, which represents a small proportion of our staff,” a spokeswoman for Marshall Wace said.

The firm has registered three women in the CF 30 category since 2009 compared with 40 men over the same period.

“Algebris continues to invest in women’s careers, developing talent and creating the next generation of female leaders in finance,” said a spokesman for the firm, which registered nine women and 24 men as a CF 30 since 2009.

Emso Asset Management said 35 per cent of its employees were women. It paid employees for the first 26 weeks of their 52 week maternity leave. It has registered nine women and 30 men as a CF 30 since 2009.

“Our diversity in employee base reflects the diversity of markets within which we make investments,” Chief Operating Officer Rory McGregor said in an emailed statement.

Emso was the only one of the 20 hedge funds to comment publicly on its maternity pay.

The 10 largest US hedge funds with a UK office — including Citadel and Millennium Management — registered slightly more women than their British counterparts, at nearly 13pc, in 2018, according to the analysis.

A spokesman for Millennium declined to comment. Citadel did not respond to requests for comment.

CF 30 is an imperfect measure of diversity because firms can have a different interpretation of the FCA guidelines as to who should be registered.

Some firms register investor relations staff as CF 30. Women tend to be well-represented in such jobs, meaning that the CF 30 category may exaggerate the actual number of women hired or promoted to be traders.

In the decade covered by the analysis, the ratio of women employed under the CF 30 designation by 20 of the top private British hedge funds never went above 23pc and averaged 16pc.

Why try?

There are no comparable figures on hedge funds’ portfolio manager hires in the United States, but data on US firms founded in the last few years show the industry remains dominated by men. Women-led firms managed only about 3pc of the assets in new funds launched between 2013 and 2017, according to figures from Hedge Fund Intelligence.

Jane Buchan, who spent nearly 20 years allocating money as chief executive of Paamco, one of the world’s biggest investors in hedge funds, says female money managers have to work harder to get investors to trust them.

Women need to outperform significantly in order to have the same asset levels as men who perform worse,” said Buchan, who now runs her own fund, Martlet Asset Management.

“With this sort of outcome, which can be shown in academic studies and what many women perceive from their own interactions with investors, why try?” Man Group, one of the few listed hedge funds, is the only UK hedge fund firm to sign up to the British government’s Women in Finance Charter, which sets targets to increase female representation in the upper echelons of the City.

The London-headquartered firm is targeting 25pc female representation in senior management roles by the end of 2020 from 22pc last year and has introduced a number of measures to improve gender diversity, including a returners’ programme for women who left the industry.

It offers 18 weeks paid leave globally for new parents, male or female.

Man Group registered five women as a CF 30 last year, but that represented a re-categorisation to comply with European rules rather than new hires.

“We have concentrated on making sure internal people can meet their potential, introduced a lot of mentoring, ensured that we always consider a female candidate and looked at things that have historically slowed down hiring women,” said Mans chief executive officer, Luke Ellis.

Women held 13pc of investment management roles at Man Group globally in 2018, up from 11pc in 2017 and 8pc in 2013, a source familiar with the matter said.

Published in Dawn, The Business and Finance Weekly, April 1st, 2019