WHERE THE BOYS ARE—GENDER, RISK TAKING, AND AUTHORITY IN INSTITUTIONAL EQUITY MANAGEMENT

Margaret Stumpp

This paper examines the gender distribution of key investment professionals with decision making and oversight authority in institutional equity management. We find that women are heavily underrepresented among almost all key positions—not just within portfolio management. We find no evidence that this is attributable to differences in skill, or the consequence of any relationship between gender and either asset gathering capability or departure rates. However, we do find some evidence of self-selection away from a risky career as women tend to be more highly represented in lower-risk strategies; appear somewhat more benchmark-oriented; exhibit lower tracking error, and exhibit less idiosyncratic risk than their male counterparts. This observation has important ramifications for both career counseling and diversity outreach programs.