Survey: Women Have Tougher Road to Success in PE, VC and Hedge Funds

Women have a more difficult time succeeding in alternative investments than men, according to a survey of female executives.

“What could help women advance in private equity, venture capital, or hedge funds? Women need exposure to roles that allow them to establish an investment track record, a report from Rothstein Kass and 85 Broads, a networking organization for women, found. Roughly 40% of female execs in alternative investments think women lack the investment track record of their male peers, the report said.

For the report, “Women in Alternative Investments – Industry Outlook and Trends,” questions were asked of 189 executive-level women during the third quarter. The female execs came from the hedge fund, private equity or venture capital sectors (more than half were from PE, nearly one-fifth from VC and 32.3% were hedge fund execs), Rothstein Kass said. Roughly 50% questioned worked at firms or funds with $1 billion or more in AUM. Over 60% had at least a decade of experience and a majority sit on their firm’s investment committee, the study said.

More than half of respondents said leveraging strong professional networks was critical to their success, the report said. Roughly 40% think industry organizations are the most useful networking opportunities, the survey said.

“It’s imperative that more women enter the alternative investment community,” said Stephanie Hanbury-Brown, an MD with Golden Seeds, an angel investor network, in the report. “We need to demonstrate that we can be and are good stewards of capital across sectors.”

Nearly 65% of the execs questioned believe women have a harder time succeeding in the industry, the report said. Most of the execs also think it’s more difficult for women-run funds to raise capital. One-third think women are still bogged down by the stereotype that women are more committed to family and personal responsibilities than their career. Only 21% of respondents think women need more help managing their personal/family responsibilities.

Despite these obstacles, more than half of female execs surveyed expect to launch a new fund in the next 18 months, the Rothstein Kass survey said.

Nearly 70% think the next 18 months will be more difficult for alternative investments, the report said. However, 62% think there will be more funds launched during the next 18 months. Short term market challenges will continue to hamper the industry and about 60% of execs expect more fund liquidations.

About 80% think it will take longer for private equity to sell their portfolio companies, the survey said. Nearly all of those surveyed think competition for investment capital from LPs will increase.

(CORRECTION: The word “Road” in the headline was incorrectly written “Role” in the original version of this post.)