Institutional Investor's Alpha Magazine - September 2008 - (Page 53)

Women Hedge Fund Managers in women being an important part of this world.” Casey qualiﬁes his view, however: “It’s still in its early stages.” Within the 10,000-fund, nearly $2 trillion hedge fund world, there are roughly 325 women managers, according to Susan Solovay, CEO of New York–based fund of funds Pomegranate Capital Management. Collectively, they report returns on $60 billion in assets to Pomegranate, which Solovay founded in 2006 to exploit perceived inefﬁciencies in the hedge fund market by investing solely with women managers. Some women are heading for hedge funds straight out of college or business school, bypassing investment banks and proprietary trading desks. “We’re seeing more women because of the way the industry is growing,” notes Flisser. And an increasing number of seeding platforms like Capital Z and Chicago-based Citadel Group’s PioneerPath are giving women more start-up opportunities. A Greenwich, Connecticut–based women’s group called 85 Broads — which began as a coalition of current and former Goldman, Sachs & Co. employees in 1997 (85 Broad Street is Goldman Sachs’ address in New York) — has launched Bench Strength, a program to encourage the top tier of female college graduates to join hedge funds. Janet Hanson, founder of 85 Broads, is working with John Pierson, president and CEO of hedge fund search ﬁrm 10X Partners, to funnel qualiﬁed women into hedge funds. “Although I see fewer women than men, I see more women ﬂowing in now,” Pierson says. “These women are pretty exceptional.” Although many investors may not have noticed, dozens of women have been quietly posting impressive returns. Sandra Manzke, CEO of Maxam Capital Management, a $2.4 billion fund of hedge funds in Darien, Connecticut, began investing in long-only women managers in 1986 soon after she founded her ﬁ rst investment ﬁrm, Tremont Partners. More recently, she designed the Maxam Diversity Fund to invest with ten hedge fund managers, all minority or female. The Chicago Transit Authority committed $10 million in 2005 and has seeded half of that so far. That fund has already proved its value, and the woman-run funds have performed even better. Maxam tracks 150 minority- and woman-managed hedge funds — 43 are woman-owned — and the six woman-owned funds in the Diversity Fund collectively produced an 11.28 percent annualized return for the ﬁve years ended June 30, 2008, compared with 9.45 percent for the Diversity Fund as a whole and 7.65 percent for the HFRI fund-of-funds composite index. For the 12 months ended June 30 — arguably one of the worst periods in ﬁnancial history — the six woman-managed funds were up 5.36 percent, outperforming the total fund (up 3.89 percent) and the HFRI fund-of-funds index (up 0.35 percent). By comparison, the Standard & Poor’s 500 index was down 13.11 percent. Despite their investment success, women for the most part have struggled to attract seed money. “Women have a harder time raising money,” observes Johns Hopkins’s Crecelius. Although a handful of women oversee more than $1 billion in assets, none of their funds has made Since founding Kacela Partners in 2006, Joanne Egrovich (left) has returned 14.9 percent before fees, easily outperforming the S&P consumer discretionary index. Highbridge Capital’s Jennifer Pomerantz, 29, is one of the youngest managers in the hedge fund world. SEPTEMBER 2008 • INSTITUTIONAL INVESTOR’S ALPHA • 53

Table of Contents Feed for the Digital Edition of Institutional Investor's Alpha Magazine - September 2008

Institutional Investor's Alpha Magazine - September 2008 Contents Letter from the Editor Longs & Shorts Pension Corner: Culling the Herd The Good Guys: Ending the Cycle Interview: Press Credentials Cover Story: Rethinking Chris Hohn Strategies: At the Edge of the Earth Profile: Alpha Femals Strategies: Tails, You Lose Research Center: The Top Equity Trading Firms Alpha Bytes: The Light Is On Unhedged: Commentary: Not-So-Dire Diagnosis

Institutional Investor's Alpha Magazine - September 2008

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