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Oktober 05, 2021

For Gender Equality in Asset Management

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Oktober 05, 2021

For Gender Equality in Asset Management


Insight Article

For Gender Equality in Asset Management

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Oktober 05, 2021

 
 

In 2021, Seema Hingorani, a managing director at Morgan Stanley Investment Management (MSIM), received an unusual honor for a U.S. citizen -- the Légion d'Honneur. The medal was granted in recognition of her work addressing the gender gap in the global asset management industry through Girls Who Invest, a non-profit she founded in the U.S. in 2015. While she was the chief investment officer of the New York City Retirement Systems, Hingorani was indeed amazed by the paucity of women she met among asset managers. Thus, she founded an organization aimed at educating a new generation of females to enter and renew the industry. Its long-term goal: for women to oversee 30% of industry AUM by 2030.1

Over a five-year period, more than 850 college students have attended the 10-week, subsidized summer program, physically or virtually. A proof of its success: 80% of alumnae have stayed in the investment business since graduating.2

Diversity is Essential

There's little doubt the industry faces large-scale gender inequality. Just 9% of funds domiciled in the U.S. are managed by women. Efforts to improve the balance have so far only brought modest gains: The percentage of female fund managers globally increased from 10.3% in 2016 to 11% in 2020.3

While developing Girls Who Invest, Hingorani discovered several reasons explaining this gap. First, is the lack of a pipeline. Also, many young women know little about the investment management industry or had been turned off by unflattering stereotypes of the finance industry.

However, multiple studies have shown that gender-diverse investment teams outperform others. Diverse viewpoints typically lead indeed to more innovative, balanced, and informed decisions. According to a study by consulting firm McKinsey & Co., companies in the top-quartile for gender diversity on executive teams were 21% more likely to outperform on profitability and 27% more likely to have superior value creation. 4

MSIM’s Ambition is to Lead the Way

With gender diversity's positive impact on performance and more demand for change from clients, investment firms have started stepping up. Among the changes made: Introducing programs aimed at boosting the pipeline of women recruits, holding managers accountable for meeting diversity goals, and forming mentorship programs matching senior executives with more-junior female talent.

In 2019, Hingorani joined MSIM, and soon after created a junior investment talent-development program aimed at the retention of diverse talent in the business.  Hingorani is supporting the firm in this transition on a daily basis. One initiative involves supporting over 100 junior investment professionals from all parts of the world. The participants are assigned to small groups, each working with a sponsor. Team members come from mid and junior levels in the organization and work across all asset classes. “We're helping younger talent quickly build their investing expertise and professional relationships to position them better for long-term careers at MSIM and in the industry," she says.

These advances are helping close the gender gap, a critical societal and corporate challenge. MSIM is proud to play an important role in this transformation and to lead the way.

 
 

1 Targets may not be realized and cannot be guaranteed. Targets may be changed at any time. 

2 Past performance is not indicative of future results.

3 https://citywireasia.com/news/stark-figures-highlight-asset-managers-gender-problem/a1400738

4 Diversification does not eliminate the risk of loss.


 
seema.hingorani
Managing Director
 
 
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The views and opinions are those of Seema Hingorani as of the date of publication and are subject to change at any time due to market or economic conditions and may not necessarily come to pass. Furthermore, the views will not be updated or otherwise revised to reflect information that subsequently becomes available or circumstances existing, or changes occurring, after the date of publication. The views expressed do not reflect the opinions of all portfolio managers at Morgan Stanley Investment Management (MSIM) or the views of the Firm as a whole, and may not be reflected in all the strategies and products that the Firm offers.

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