At Hedge Funds, Where Are the Women?

Rob Copeland | Wall Street Journal

At hedge funds, women do just about any job—but rarely run the money.

Of the largest 50 U.S. hedge funds by assets under management, only two have women as their top investment executive, according to a Wall Street Journal analysis of data from researcher Absolute Return. In that same group of 50 hedge funds, half the investor-relations or marketing departments have female heads or co-heads.

Below the top manager, investment teams are overwhelmingly male at hedge funds, according to industry executives, who call it an extreme example of a larger reality: Women are clustered in specific and lower-paying corners of the financial world.

Boys’ Club

Of the 50 largest U.S. hedge funds by assets under management, a woman makes the top investment decisions at only two.

Top 50 U.S. hedge funds by assets under management*

$18.5 billion, Qi Wang, PIMCO

$10.0 billion, Nancy Zimmerman,Bracebridge Capital

At those same funds, women lead 50% of investor-relations and marketing teams.

*Hedge-fund assets only Sources: Absolute Return (Jan. 2018 AUM); Staff reporting (gender)

The sorting starts early, according to industry executives. They say men are typically brought in as traders or analysts, often after entry-level stints in investment banking or private equity. They are trained by funds on buying stocks, bonds and other assets with client money. This is the so-called front office, where most every billionaire hedge-fund manager you’ve ever heard of works.

Women instead tend to be assigned “middle-office” or “back-office” positions handling legal, operational and marketing matters, industry executives say. Often they take investor-relations or so-called capital-introduction jobs. These positions are rarely involved in important investment decisions.

In the best circumstances, these employees are the fulcrum that can hold a hedge fund together, cajoling deep-pocketed backers to stick around when performance struggles, according to interviews with dozens of men and women in the industry. At worst, they are promotional staff hired to lure wandering investors into the equivalent of a trade-show booth—in part by catering to male egos.

Tasks often include cold-calling prospective investors—most of them men—and wooing them over one-on-one meals. They set up hundreds of meetings, hoping to find one or two wealthy backers for their fund. SALT—a well-known hedge-fund confab held in Las Vegas—provides free hairstyling, makeup and manicures to attendees and suggests that investor meetings be held at private pool cabanas.

A spokeswoman for the SALT conference declined to comment.

Hedge funds operate differently from most of the corporate world, with C-suite titles relatively unimportant. More power and prestige are concentrated on members of the investment team. They come up with trading ideas, and compete against each other to manage more of the hedge fund’s money. More-successful trades are rewarded with a higher future allotment of the fund’s portfolio, and a proportionally larger paycheck.

Below the lead portfolio manager, senior hedge-fund investment analysts are paid on average $700,000 a year and some earn more than $10 million, according to the Options Group, a recruiting firm. In senior hedge-fund investor relations, where women tend to cluster, staffers make on average $450,000 a year.

“It’s a vicious cycle,” says Dominique Mielle, recently retired as the only female investing partner at hedge-fund giant Canyon Capital. “The only women we know that exist at hedge funds are in IR or sales, and therefore that’s where they put them.” Canyon Capital declined to comment.

As Verition Fund Management, the hedge fund founded by executives from Amaranth Advisors, was struggling to raise money around six years ago, it brought in a new hire to help, 26-year-old Larissa Posner. Ms. Posner, who had moved to the U.S. from Ukraine about a year earlier, had won a series of beauty pageants and was featured in an international edition of men’s magazine Maxim as “the sexiest swimsuit model in the world.” She had previously worked for a video website geared toward financial professionals.

Verition hired Ms. Posner, who doesn’t have a college degree, according to securities filings, as a vice president and dispatched her to industry events to chat up deep-pocketed investors. Some of the potential investors she approached say they eagerly passed around photos from her prior career, including one in which she posed in a red bikini leaning against a Corvette. Verition and Ms. Posner, who stayed at the firm for roughly a year and a half, separately declined to comment. Ms. Posner now runs several financial-services startups, according to filings.

Other funds have hired former professional cheerleaders or youth basketball coaches directly into marketing roles, industry executives say.

“The whole mind-set is: There’s this gorgeous babe at home, and I’m going to have this gorgeous babe in the office, because what does that say about me? I’m surrounded by gorgeous babes,” says Marjorie Kaufman, a 30-year industry veteran who worked at five hedge funds and rose to be managing director at one, where she was the only woman on the executive committee.

“The everyday reality of being at a hedge fund is to lock yourself in the fraternity basement where everyone around is acting like a frat bro,” said Ms. Kaufman, who no longer works in the hedge-fund industry.

Her most recent hedge-fund employer declined to comment.

In interviews with dozens of current female hedge-fund investor-relations executives, some said they had originally applied for investment roles, and been offered instead a marketing job. One woman, who holds an Ivy League degree in economics, says she was hired for an investment job, but shortly after she was shifted into marketing tasks. When she showed little interest, she was offered a buyout to leave. Thus ended her hedge-fund career in under a year.

Many employees, male and female, in marketing and investor relations express satisfaction with their careers. They say they are happy to avoid the punishing hours and rigor required for investing roles. Some say their personalities were better suited to fundraising than portfolio management. Says one woman: “I don’t work crazy hours, I’m not here at 3 a.m. crunching a spreadsheet, I can go to my kids’ parties and open up my laptop and do my job.”

The exceptions aren’t eager to call attention to themselves.

Both women with top investing responsibility at large U.S. hedge funds— Nancy Zimmerman, at Bracebridge Capital, and Qi Wang, who leads the flagship hedge fund at asset-management giant Pacific Investment Management Co.—declined to be interviewed. “We don’t really think of anyone’s gender, including mine,” said Ms. Zimmerman.

In a later statement through a spokesman, Ms. Zimmerman said, “I believe that it is important to provide women with the opportunities that will enable them to reach the highest levels of investment management.”

A networking group once called “100 Women In Hedge Funds” changed its name two years ago to “100 Women in Finance. The organization’s executive director, Amanda Pullinger, said the name change was in part due to the difficulty of finding sufficient women working for hedge funds, as well as reflective of the organization’s expansion into the broader financial industry. None of the 27 women on its board of directors or advisory council manage money for a hedge fund. “Investment professionals generally aren’t joiners of things,” Ms. Pullinger said.

Susan Mata, who worked for two decades in the industry, says while she had no complaint about her employer, the atmosphere in the industry left her drained.

“Every single hedge-fund event I walked into had this collection of very pretty women attending to clients,” she says.

Last year, she packed it in as head of investor relations at a multibillion-dollar hedge-fund investment firm. Her former employer didn’t respond to a request for comment.

“I love the industry,” she says. “But I did everything I could in IR. I didn’t know where else to take my career.”

She now runs a website that sells T-shirts.

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