Member-only story
The Investment Management Industry Needs More Women — Here’s How to Make That Happen
Book review of “Undiversified: The Big Gender Short in Investment Management”
The key message of Modern Portfolio Theory, developed seven decades ago by Nobel laureate, Harry Markowitz, can be summarized succinctly: when it comes to your investments, it pays to be diversified. Yet when it comes to the investment management industry itself, according to a recent study, gender diversification is lacking: only 10 percent of portfolio managers are women, and investment management firms that are majority owned by women manage less than 1 percent of global investable assets. According to Ellen Carr and Katrina Dudley, this headline statistic was the genesis for their thoughtful and practical book, Undiversified: The Big Gender Short in Investment Management (Columbia Business School Publishing).
As a white male business school finance professor, you might think I’m the farthest thing from a role model for aspiring women in investment management, and you might wonder why I’m reviewing such a book — true enough. And yet I’m actually trying to be part of one of the solutions recommended by the authors, which is how I came across this book. When our finance faculty group was approached by our (female) dean to create a new program to attract undergraduate women into asset management, through an intensive in-class boot camp and paid summer internship, I became the inaugural co-director of the Ivey Business School’s Women in Asset Management program. Searching for solid data on the participation rate of women in investment management, I came across this valuable research, a must-read for anyone who is an investor, insider, or influencer in investment management, and who cares about workplace inequalities. The authors define the gender issue in investment management, diagnose it, and propose solutions.
There’s much to like about the book. First, it’s very accessible, whether you are currently an industry insider, or perhaps a young woman interested in knowing more about career prospects. Second, it goes beyond anecdotes…
