Women in Alternative Investments Planning New Fund Rollouts in Next 18 Months

December 07, 2011 at 06:40 AM
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A new survey of women who work in the alternative investments sector finds that a majority expects the next 18 months to be challenging for the industry, but are more optimistic about the investment outlook and new fund launches within that period.

"Women in Alternative Investments—Industry Outlook and Trends," released Tuesday by Rothstein Kass, a professional services provider, and 85 Broads, the global women's network, is based on a third quarter survey of 189 executive-level women who invest capital through hedge funds, private equity funds or venture capital funds.

"Over the past decade, there has been a significant increase in the number of successful women in the alternative investment community," Kelly Easterling, a principal in the financial services practice at Rothstein Kass, said in a statement. "These women are having a major impact on the direction of the industry."

Most survey respondents believe it is harder for funds managed by women to attract capital. Slightly more than 40% ascribe this to the fact that women often lack the investment track record their male peers have.

About a third of respondents believe that women's capital-raising efforts are hindered by the stereotype that women are more committed to family and personal responsibilities than to their career. And slightly over 30% believe it is harder for women to raise capital because they have less access to investor networks.

Other notable findings include:

  • Nearly 70% of the women surveyed expect the next 18 months to be more difficult than the preceding period. Still, some 60% anticipate an increase in new fund launches over the same period.
  • More than half of the women surveyed are planning to introduce a new fund in the next 18 months.
  • More than 70% of respondents plan to raise capital in the next 18 months.
  • Respondents see family offices (52%), pension funds (52%), high-net-worth individuals (50%), foundations (41%) and endowments (35%) as the most likely sources of new capital. The also view sovereign wealth funds (25%) and "other foreign sources of capital" (18%) as significant sources of money.
  • In an uncertain economic climate, over 65% of participants are confident that attractive investment opportunities will emerge in the next 18 months.
  • A majority of respondents expect terms for new capital to be less favorable to fund managers in the next 18 months.
  • To facilitate women's advancement in the industry, survey participants noted that women need greater access to roles that enable them to establish an investment track record, more women need to be recruited into the industry and institutional investors should consider women's representation in investment roles when making allocations.

The report also identifies several factors critical to respondents' success in the industry. The most important ones:

  • Having a strong professional network;
  • Having strong mentoring relationships;
  • Willingness to take risks;
  • Strategic career planning;
  • Strong support networks.

"In recent years, we've seen greater numbers of senior-level women strategically investing significant capital in start-up companies and funds led by women," Janet Hanson, founder and chief executive of 85 Broads, said in the statement. Senior women are making these investments, in ventures often led by young women, not out of an obligation to give back or for charitable purposes, but because they are investing in real talent."

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