Fund participants are learning what married men have known for some time: If you want to grow your money, hand it over to a woman.
In a new survey of the alternative investment landscape, hedge funds and other types of funds run by women are not only growing but they are outperforming similar firms run by men.
According to Rothstein Kass, the authors of "Women in Alternative Investments: Building Momentum in 2013 and Beyond," hedge funds that were owned or managed by a woman performed ahead of the industry. They’re also leading for the year-to-date through September 2012.
The Rothstein Kass Women in Alternatives Hedge Index produced a year-to-date net return through September of 8.95 percent, in comparison to the HFRX Global Hedge Fund Index, which has generated a 2.69 percent net return through September. Furthermore, over a five year period, the Rothstein Kass WAI Hedge Index outperformed both the HFRX Global Hedge Fund Index and the S&P 500.
The main reason? Women have a different appetite for risk than their male counterparts, for starters.
"The fact that women-owned or managed hedge funds have been able to handily outperform their male counterparts is not particularly surprising," says Meredith Jones, director at Rothstein Kass in a press statement. "There have been a number of studies that show women investors to be more risk averse, and therefore potentially better able to escape market downturns and volatility. The outperformance by women-owned or managed hedge funds should make the case that investing in these types of funds is a smart business decision, rather than one that just feels good."
The report, researched and written by Rothstein Kass, a provider for the financial services industry, profiled 366 senior women in the alternative investment industry. They found that while women occupy the highest percentage of C-level jobs within the operational space, at 35.0 percent -- followed closely by C-level compliance and financial positions, at 34.0 percent and 32.0 percent, respectively -- the number of women running the funds remains quite low. Of the firms polled, fewer than 20 percent of women run or manage their own hedge funds.
Of those firms owned by women, hedge funds were the most likely to have women-owned or managed status (16.8 percent), followed by venture capital (13 percent) and private equity (12 percent).
What is holding women back from running their own hedge funds? It might be the women themselves. Along with a lack of available positions in the industry where a women can develop a track record, the report cited women’s desire. "(W)omen lacked the motivation to enter and stay in the industry," the report found.
[What’s the State of the Hedge Fund Industry for 2013? Read on.]