Last year wasn’t just rough for managed futures – hedge funds had a lackluster year compared to the soaring equity indices. But as it turns out, their struggles weren’t uniform – a subset of the industry did quite a bit better than their peers, and Dealbook is chalking it up to hedge funds that had a certain XX factor… that is to say, female managers:
An index from the professional services firm Rothstein Kass showed that female hedge fund managers produced a return of 8.95 percent through the third quarter of 2012. By contrast, the HFRX Global Hedge Fund Index, released by Hedge Fund Research, logged a 2.69 percent net return through September.
Rothstein Kass’s latest annual survey of women in alternative investments, to be released on Thursday, found that female managers had a strong track record of returns. The report, reflecting the responses of 366 senior women in the alternative investment industry, illustrates a persistent gender disparity on Wall Street while highlighting the achievements of successful women.
So is a woman’s touch the secret to hedge fund success? Well, the limited research out there on investing differences between the genders suggests that women tend to be more risk-averse, wait longer before buying or selling, and contrary to the popular stereotype, be less influenced by emotion when making investment decisions. Those studies have tended to focus on individual investors rather than managers, however, and it’s not clear if such broad-based surveys are applicable.
When it comes to managed futures, one of the stalwarts of the industry, EMC Capital, is run by the famed “turtle trader” Liz Cheval. EMC, by the way, was up an estimated 4.92% in 2012 going into November, well above the major CTA indices (Disclaimer: past performance is not necessarily indicative of future results).
If risk aversion does play a role, in the long run it could result in diminished returns when big opportunities arise… but in a year like 2012, women’s intuition seems to have been a valuable asset.
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