PAVING THE WAY FOR RESEARCH ON WOMEN’S PARTICIPATION IN ASSET MANAGEMENT

career: from trainee to retiree;

● Women who had excelled in the industry as well as those who had felt they had no choice but to leave the industry; and and implications. By prioritising this study, we aim to uncover the challenges faced by women in the industry, with the ultimate goal of fostering greater diversity and inclusivity

Welcome to a groundbreaking Collective Insight issue, where we delve into a pivotal research study that explores the underrepresentation of women in the asset management industry

Recent statistics have shown that women make up only 20% of the workforce in the asset management sector in South Africa However, a remarkable contrast can be seen at the EPPF, where women constitute more than 50% of the asset management professionals, all of whom are making significant contributions and driving change within the industry

Despite this achievement, we recognised the pressing need to investigate the broader underrepresentation issue, making it a top priority in our pursuit of transformative change

To shed light on this important topic, we approached the Responsible Finance Initiative at the Gordon Institute of Business Science to conduct research on the phenomenon. This collaboration led to the creation of our Diversity in Asset Management study, which can be accessed on our website (www eppf co za)

In this edition of Collective Insight, we share with you what the participants of the EPPF study felt about the study’ s conclusions Did the insights seem to ring true? Did the stories resonate? And, did the suggestions for a way forward seem viable and implementable?

First a note of caution This research is a qualitative compilation of women ’ s lived experiences as investment professionals Did it capture all women in the industry in South Africa? At best, it probably only captured a third That third, however, represented an excellent diversified sample It included:

● Women from large asset management houses, small boutiques and asset management teams embedded in larger financial service companies;

● Women at different phases of their

● Women (and some men) across a broad demographic spectrum This means that we must take care not to draw sweeping conclusions from anecdotal observations Still, the study provides a clearer template for how our research on this problem needs to evolve: it’ s not about increasing the number of women as much as it is about

This study represents a paradigm shift in our assessment of the shortage of women and other diversifying factors in asset management We firmly believe that true transformation can only be achieved when we challenge conventional norms and redefine leadership roles within our own organisation and that of our industry partners

Through this study, we are poised to pave the way for a new era in asset management, one that embraces diversity, empowers women and unlocks the untapped potential of our industry

Our investment philosophy revolves around aligning our members’ needs with capable managers who understand the power of an outcomes-focused approach By fostering diversity and inclusivity, we empower our managers to navigate the complex landscape of both listed and unlisted assets, ultimately delivering superior outcomes to our valued members

The research study and this publication mark the beginning of our journey towards transformative change At the EPPF, we are fully committed to translating our findings into tangible actions. We will implement necessary changes within our organisation to promote gender diversity and equal opportunities Furthermore, we recognise the importance of continuous research to gain a deeper understanding of the dynamics surrounding gender diversity in asset management

Changing The Quality Of The Experience

Our contributors unveil why this study, and the debate it inspires, surpass previous assessments by adopting a truly distinctive approach that has the potential to reshape the essence of asset management in South Africa

Our decision to embark on this research journey was driven by a profound recognition of the shortage of women in asset management and the understanding that diversity brings power

To effectively address this issue, we knew we needed a comprehensive understanding of the underlying factors

Through these efforts, we aim to drive lasting change that resonates throughout the industry

As you delve into the pages of this issue, we invite you to join us on this trailblazing quest to shape the future of asset management Together, we can break barriers, challenge norms and create an industry that thrives on diversity, equality and innovation The time for change is now, and the EPPF is proud to be at the forefront of this transformative movement x

THE CAUSES ARE MANY; WHAT CAN BE DONE IS THE QUESTION

The reasons for women not being are multifaceted, and need to

What our participants said:

The EPPF/Gibs Diversity in Asset Management study is an important, seminal research paper that has come at a pivotal time in the evolution of the investment industry, when many competing and rapidly changing forces are weighing down on what a model for future investment success will need to look like The study is unequivocal in its recommendations that the industry we need to see will only be possible through an alignment of focus and a willingness to collectively shift gears through the entire breadth of investment value chain stakeholders, with clear and systematic planning but also with urgency

The study seeks to shift the discussion away from women being the issue, whether directly or indirectly, to a more forwardthinking and potentially uncomfortable line of questioning: why has the industry itself not resonated with or appealed to many more highly accomplished and qualified women professionals to invest their skill, time and energy in building a meaningful career in it?

If the investment industry around the world is to truly serve its stakeholders, its mission must evolve materially beyond a single-minded focus on alpha delivery (at all costs) to a more holistic approach to compounding return and impact That sort of industry will undoubtedly attract and resonate deeply with a far wider, more diverse and responsible group of true professionals and practitioners

Delphine Govender, chief investment officer of Perpetua Investment Managers

The study highlights how women, over the past two decades, have been at the forefront of reimagining how asset management can generate good outcomes rather than solely focusing on maximising firm profits, and in doing so, securing the integrity of their fiduciary responsibilities as asset managers

Positively, the study demonstrates that women are leading the charge in designing services, products and infrastructure that contribute to increasing the resilience of the sector

An oversight of the report is that it treats the asset management industry as homogeneous Put differently, for example, the analysis does not differentiate between public and private markets practitioners Similarly, it does not factor in the heterogeneity of the asset management industry on the career-pathing opportunities and multiple pathways to portfolio management and key decision-making positions Future research studies on the sector will need to consider this in their designs, especially in terms of sampling and analysis

Fatima Vawda, MD of 27four Investment

As the study suggests, we should be encouraged that women are at the forefront of the impact investing movement and urge more to join From investors and fund managers to social entrepreneurs, corporate leaders, policymakers and academic researchers, women are driving the impact investing field forward and inspiring the case for sustainable investing to improve people and planet

The reasons for this can be found in the hallmarks of what makes an impact investing solution successful

Impact investing requires a high level of collaboration across multiple stakeholders with a creative and iterative solutions mindset This is the antithesis of the “testosterone-fuelled decision-making process ” that often drives the investment environment Effective communication and relationship-building skills are critical in impact investing, as it involves engaging with various stakeholders, including investors, entrepreneurs, nonprofits and government entities.

Women leaders often excel in these areas, possessing strong interpersonal skills, active listening abilities and an inclusive leadership style that fosters trust and collaboration Arguably, a more

We need to rethink what we require of investment professionals to ensure we address the future needs of South Africans

From the study:

Research suggests that women only represent 17.2% of portfolio management professionals in South Africa. Is this a gender issue? A transformation issue? Or is the industry itself in need of a revamp?

Should we really be trying to condition women to slot into the current investment management culture, or should we be looking to change that culture to be more purpose -driven, and so more attractive to the aspirational needs of the women we interviewed?

Our findings:

An expanded set of criteria that introduces social, psychological, environmental and developmental thinking would be far more effective at opening the industry up to women candidates who can make the contributions required for a more purpose -driven investment management industry

Our suggestion:

The asset management industry needs a major marketing effort to change its image as a desirable profession with the power to effect meaningful change in South Africa T h e m e 1 collaborative mindset enables women investment professionals to leverage collective wisdom, share best practices and create synergies that also advance the field as a whole

Heather Jackson, CEO of RBN Fund Managers

The issue in asset management is not so much an image problem as a culture problem Let me reference a study by Corina Sheerin (2013) that explains the existence of gendered behaviour in education and occupational choice The study looked at the effect of individual factors, namely personality, personal identity and goals, and self-efficacy on educational and occupational choice within investment management, and concluded that there are gender differences Men defined success as having a well-paid job that gave them power and more intense competition, which is more congruent with the investment management industry, whereas women attached success and goals to helping others and being in a nurturing environment that cares for its employees

As such, fewer women chose an investment management career, where the emphasis is on personal targets, personal success, beating benchmarks and aggressive performance-driven goals rather than on group-orientated goals

Snowy Masakale, member of the Association of Black Securities and Investment Professionals

What does the future of work in the investing industry look like? Interestingly, the study highlights a vital component of aligning with client needs, yet this is only one perspective; there also needs to be an alignment with employee needs

The future of finance and work should encompass both client and employee needs, recognising their interdependence The history of the investment industry paints a picture that is tough and cutthroat, and filled with male bravado where IQ trumps EQ

The investment industry has clearly not kept up with and adapted to the future of work; instead, it is facing an increasingly vocal Gen Y and Gen Z, who require a new leadership skill set to meet their demands and they are not settling for anything less

They want to be part of a company culture that reflects their values They recognise the significance of purposeful work and the need to be acknowledged for their contribution, and they seek companies that provide holistic wellbeing and support for “mind, body and soul” within the workplace

Angelique Kalam, head of sustainable

investments at Futuregrowth Asset Management

In the area of product development, the industry would do well to incorporate input from clients There needs to be a deliberate effort to solicit input, and then product development teams need to synthesise these into specific technical inputs for the purposes of their financial modelling If the industry is to do this, and do it well, it will be relevant for many years to come and will pivot into an endeavour steeped in purpose a fundamental shift away from the status quo, which is something that is sorely needed perhaps, as the article and research seem to suggest, portfolio management, given the inability to control market outcomes for clients, should stop being so well remunerated, and other, more clientfacing/asset class allocation/investment advice roles should be given more significance

Mike

Arbuthnot,

founding voice for Asisa’s Fezeka graduate programme

Azola

Zuma, CEO of Sanlam Investment Management

What would hasten this shift? The South African investment industry’ s experience with BEE over decades highlights that the diversity of the industry is unlikely to change unless there is some form of external pressure to do so One option is to introduce official quotas, as has been the case with BEE scorecards Another is pressure from clients to build diverse teams to manage their money because they believe this would deliver better outcomes

The latter is conceivable in an environment where there’ s a shift towards the “purposeful capitalism” , as highlighted in the research report, with clients wanting more from their investment managers than a narrow focus on profits and performance track records and instead expecting to see them generate sustainable investment solutions

Cheree Dyers, CEO of Prescient Investment Management

I think a study like this one is critical We need more women in the industry, not for equality purposes but rather to improve all the outcomes mentioned in the study At the same time, we need a recognition from the industry that outcomes need to be improved linking women with better outcomes is one way, but far from the only one Programmes aimed at equal representation are doomed to fail if all we are doing is trying to force women into a role they don’t really want (in its current form, anyway)

The industry, through remuneration as a measure of importance, continues to promote portfolio management as its pinnacle

I think the finding that women would likely be more attracted to the industry if it portrayed itself as a solutions provider, and the link of that to women ’ s desire to have work that is meaningful or provides solutions, is very interesting

If this is indeed accurate and reflective of women in general, you wonder to what extent the socialisation of the girl child is to “blame” In other words, are women selfselecting away from asset management because it is deemed a profit-making industry and girls are taught to believe they should seek to take on work that benefits society? Would it not be much better if all children, boys and girls, were socialised to embrace business ideals that were beneficial to the bottom line and to society?

Unathi Loos, portfolio manager at Ninety One

The study raises several critical questions about the representation of women in the industry While the report confirms our view on the need to foster more gender diversity in the industry, it includes several findings that conflict with our own experiences and observations

It is important to start with the biggest of all perception issues the suggestion that investment management is a “boys’ club” with “clubhouse interactions” determining career trajectories and characterised by “testosterone-fuelled decision-making” In our experience, this is an outdated view and is not reflective of our own experiences in Coronation’ s investment team

Coronation Fund Managers

As Unathi Loos sums up the conundrum: The point that women ’ s underrepresentation in asset management relative to other cognitively demanding jobs is a global phenomenon (not only South African) needs more recognition Women’ s representation in other types of cognitive jobs has actually increased over the years There are also studies that show that more women than ever are studying finance but do not enter asset management It is not that women are not smart or numerate enough for fund management Clearly, there is something else about the industry that renders it less attractive to them x