It’s that time of year again. The leaves are turning pretty colors. Kids are back in school. There is a real possibility of leaving my air-conditioned Nashville home without my glasses fogging upon hitting the practically solid wall of outdoor heat and humidity. And like any good Libra lass, I’m celebrating a birthday.

That’s right, it’s time for my annual orgy of champagne, mid-life crisis, chocolate frosting and introspection. Oh, and it’s time to check the batteries on the smoke detectors – best to make sure those suckers are good and dead before I light this many candles.

One of the things I’ve noticed in particular about this year’s “I’m old AF-palooza” is how much time I spend thinking about sleep. On any given day (and night), I’m likely to be contemplating the following questions:

  1. Why can’t I fall asleep?
  2. Why the hell am I awake at this hour?
  3. How much longer can I sleep before my alarm goes off?
  4. Why did I resist all those naps as a kid?

I even bought a nifty little device to track and rate my sleep (oh, the joy’s of being quantitatively oriented!). Every night, this glowy orb tracks how long I sleep, when I wake, how long I spend in deep sleep, air quality in my bedroom, humidity levels (in the South – HA!), noise and movement. 

To sleep, no chance to dream

To sleep, no chance to dream

Yes, I’ve learned a lot about my nocturnal habits from my sleep tracker – for example, I move around 17% less than the average user of the sleep tracking system, I’m guessing due to having two giant Siamese cats pinning me down - but the one thing I didn’t need it to tell me was that I SUCK at sleep.

I’m not sure when I went from “I can sleep 12 hours straight and easily snooze through lunch” to “If I fall asleep RIGHT NOW I can still sleep 3 hours before my flight….RIGHT NOW and I can still get 2.75 hours…1.5 hours….” but it definitely happened.

I don’t drink caffeine. I exercise. I bought a new age aromatherapy diffuser and something helpfully called “Serenity Now” to put into it. I got an air purifier, a new mattress and great sheets.

But no matter what I try, I am a terrible sleeper.

I’ve concluded that it must have something to do with stress. I do spend an inordinate amount of time thinking about life, the universe and everything, so perhaps that’s my problem.

So in honor of my 46th year on the planet, I decided to compile a list of the top 46-investment related things I worry about at night. They do say admitting the problem is the first step in solving it, after all.

In no particular order:

  1. $2 trillion increase in index-tracking US based funds, which leads me to…
  2. All beta-driven portfolios
  3. Short-term investment memory loss (we DID just have a 10 year index loss and it only ended in 2009…)
  4. “Smart” beta
  5.  Mo’ Robo – the proliferation (and the dispersion of results) of robo-advisors
  6. Standard deviation as a measure of risk
  7. Mandatory compliance training - don’t I know not to take money from Iran and North Korea by now?
  8. Spurious correlations and/or bad data
  9. Whether my mom’s pension will remain solvent or whether I have a new roommate in my future
  10. Politicizing investment decisions
  11. Did I really just Tweet, Blog or say that at a conference?
  12. Focusing on fees and not value
  13. Robo-advisors + self-driving cars equals Skynet?
  14. Going through compliance courses too quickly & having to do them over again
  15. Short-term investment focus
  16. Will I ever have to wait in line for the women’s bathroom at an investment event? Ever?
  17. Average performance as a proxy for actual performance versus an understanding of opportunity and dispersion of returns
  18. The slow starvation of emerging managers
  19. Is my industry really as evil/greedy/stupid as it’s portrayed
  20. Factor based investing – I’m reasonably smart – why don’t I get this?
  21. Dwindling supply of short-sellers
  22. Government regulatory requirements, institutional investment requirements and the barriers to new fund formation
  23. “Chex Offenders” – financial advisors and investment managers who rip off old people (and, weirdly, athletes)
  24. The vegetarian option at conference luncheons – WHAT IS THAT THING?
  25. Seriously, does anyone actually read a 57-page RFP?
  26. Boxes...check, style, due diligence...
  27. Tell me again about how hedge fund fees are 2 & 20…
  28. The markets on November 9th
  29. The oak-y aftertaste of conference cocktail party bad chardonnay
  30. Drawdowns – long ones mostly, but unexpected ones, too
  31. Dry powder and oversubscribed funds
  32. Getting everyone on the same page when it comes to ESG investing or, hell, even just the definition
  33. Forward looking private equity returns (see also: Will my mom’s pension remain solvent)
  34. Will my investment savvy and sarcasm one day be replaced by a robot (see also: Mo’ Robo)
  35. After the election, will my future investment jobs be determined by my membership in a post-apocalyptic faction chosen by my blood type?
  36. How many calories are in accountant-provided, conference giveaway tinned mints? (See also: conference chardonnay)
  37. Why are financial advisors who focus on asset gathering more successful than ones that focus on investment management? #Assbackward
  38. Dunning Krueger, the Endowment Effect and a whole host of ways we screw ourselves in investment decision making
  39. Why divestment is almost always a bad idea
  40. Active investment managers – bless their hearts – they probably aren’t sleeping any better than I am right now
  41. Clone, enhanced index and replication funds – why can’t we just K.I.S.S.
  42. The use of PowerPoint should be outlawed in investment presentations. Like seriously, against the actual law - a taser-able offense.
  43. Will emerging markets ever emerge?
  44. Investment industry diversity – why is it taking so looonnnnggg?
  45. Real estate bubbles – e.g. - what happens to Nashville’s market when our hipness wears off? And is there a finite supply of skinny-jean wearing microbrew aficionados who want to open artisan mayonnaise stores that could slow demand? Note to self, ask someone in Brooklyn….
  46. Did anyone even notice that hedge funds have posted gains for seven straight months?

Yep, looking at this list it’s little wonder that sleep eludes me. If anyone can help alleviate my “invest-istential” angst, I’m all ears. In the meantime, feel free to suggest essential oils, soothing teas and other avenues for getting some shuteye.


Sources and Bonus Reading: 

Asset flows to ETFs:

Recent HF Performance (buried)

HF Replication:

Average HF Fees:

Political Agendas & Investing:

Asset Gathering vs. Investment Mgmt:

World's Largest PE Fund:  

Spurious Correlations:

Short-Term Thinking - 5 Months Does Not Track Record Make:


My ex and I parted ways about a year ago. After taking some time to eat some ice cream, clean out my closets and get my personal feng shui back in order, I decided recently it was time to re-enter the dating scene.

Unfortunately, as someone who A) works from home and B) travels extensively, I realized that meeting men who weren’t delivering FedEx packages or patting me down in the airport was going to be a bit challenging. So I bit the bullet and did the online dating thing.

Color me PTSD’ed. 

My first day at the online ‘all-you-can-date’ buffet saw me literally innundated with emails. “Hey!” I thought. “I must still have it!.”

But then I started to actually open those emails and realized that nearly all of the men who had emailed me could be categorized into one of three buckets:

  1. Men holding things they had killed;
  2. Men my dad’s age and older; and
  3. Curiously, Civil War re-enactors (As an aside, do folks not realize the South actually lost the Civil War? I mean, isn’t that kind of like re-enacting the Titanic sinking over and over again? Big fanfare. Long denouement. Everyone dies. But I digress…)


My mind started racing.

“Well, if this is the best that’s out there for me these days, I’m going to be single forever,” I thought.

“Do you suppose they have nunneries for spiritual, not religious, former Presbyterians-quarter Jews whose favorite form of cardio is shopping and who want to endow the cloister not only with their worldly ‘dowry’ but with vast amounts of high quality hair gel???” I wondered.

Seriously. My dating life was over. Kaput. I was hopeless. Driven to salted caramel ice cream, red velvet cake, and re-runs of the BBC's Pride and Predjudice in an instant.

And then I realized something.

I had fallen for literally one of the oldest tricks in the mind’s playbook. Instead of considering the known unknowns (i.e. – the thousands of men online and in the physical world from whom I hadn’t received disturbing, Santa Clause-esque pictures), I had taken the known knowns and concluded that I would eventually die alone and be eaten by my cats. And don’t even get me started on the unknown unkowns in this scenario. I mean, Bridget Jones-type endings don’t just happen in the movies, right?

Daniel Kahenman explained this information processing phenomenon in his book Thinking Fast And Slow as “what you see is all there is (WYSIATI),” and I was a classic victim.

But it was somewhat comforting to me to remember that I’m not the only one that falls for this little mind game. The investment industry does it all the darn time. In fact, it’s one of the things that makes me the kinda tired about the work I do.

Don’t believe me? Think about the following areas:

Hedge Fund Returns: A classic example of WYSIATI, we all know that hedge fund returns have been positively tragic for years, right? I mean, we see the HFRI Asset Weighted Index is down -0.21% through July and that obviously means that all funds have struggled to post any kind of decent returns. Well, hold on there a minute, Sparky. What if I told you that looking at that one number was giving you a bad case of the known knowns? What about all of the other funds in the HFR database? I guess they’re underperforming, too? Nope. Even if you look at other index categories you can see instances of strong outperformance: Credit Arb – up 5.17%, Distressed – up 6.20%, Equity Hedge Energy – up 10.73%, and those are all averages. Or what about the small funds I'm always pushing on y'all? They are up 4.1% for the year to date, according to industry watcher Preqin, compared with a somewhat anemic gain of 0.54% for the "billion dollar club." In fact, these numbers are the known unknowns – the numbers we could consider, but we don’t because there’s a nice, neat single little index number for us to rely on. And then you’ve got the unknown unknowns – the funds that DON’T report to HFR and aren’t accounted for in their index. I know of funds that are up 10%, 15% even 20%+ for the year. In a universe of 10,000 funds, drawing conclusions from one bit of known known data just doesn’t cut it.

Diversity: In April 2015, Marc Andreessen famously said in an interview that “he has tried to hire an unnamed woman general partner to Andreessen Horowitz five times. Each time, she’s turned him down.” See? Even a luminary in the venture capital world can get sucked into WYSIATI. Because the “unnamed woman” was likely one of the few females Andreessen associates with in the industry, she constitutes his entire universe. She is his known known. And if you think there aren’t great women and minority candidates, funds or investment opportunities out there, the problem is likely with you. Cultivating different networks, rewriting job descriptions to attract different applicants, working with recruiters who specialize in diversity, hell, even just being more intentional about hiring and investing can reveal a wealth of candidates that can help bring cognitive and behavioral alpha to your firm.

Fund Fees: Hedge fund fees are 2 and 20. 2 and 20. 2 and 20. I hear (and read) this so much I want to vomit. Do some funds charge 2 and 20? Sure. Do some funds (read: most funds) charge less, if not in headline fees, in actual fees? Hell yes! The average fees for a hedge fund these days is about 1.55% and 18% and declining. For new fund launches, fees were remarkably stable for years, never approaching the 2 and 20 milestone on average. And what’s more, roughly 68% of funds in a Seward & Kissel study offered reduced fees for longer lock ups, while 82% of equity funds and 29% of non-equity funds offered reduced-fee founders share classes. And what about hurdle rates? An investor recently swore to me that “no hedge funds have hurdle rates.” Well, that’s just bupkis. A show of other investor hands in the room immediately dispelled that myth, proving that, while not the majority of funds, some funds do have benchmarks to beat before they take their incentive allocation. What that one investor saw was not all there was.

Indices: Can’t Beat ‘Em, Join ‘Em: Obviously, the entire investment industry is trending towards passive investments. You can’t swing a dead pouty fish without hitting an article touting the death or underperformance of active investment management. And for people who have only been investing over the last 10 years or so, it probably looks like the S&P 500 is a sure bet. Always goes up, right? Well, wrong. While it’s certainly true that the S&P does tend to go up over time, you can never be sure what the time frame will be, and whether you’ll have time to recover from any unexpected downturn. But the bull market we’ve seen since March 9, 2009 isn’t all there is. Actually, if you recall, at that point in time, the S&P 500 had just experienced a 10-year losing streak. Ouch. Don't believe me? Ask any Gen X'er like me how much Reality Bites when the first 10 years of your 401k saving is wiped out by a tech wreck. Sorry, Millennials, but you haven't cornered the market on false financial starts quite yet. 

Investment Opportunities/Herding: Private equity and venture capital dry powder with nowhere to go. Hedge funds all own the same stocks. Crowded trades. High valuations. What investor could possibly make money in this environment? Once again, 13-Fs, Uber and Apple aren’t all there is. Even though we tend to fixate on the visible data, there are a number of niche-y, networked, regional, club-deal and other funds out there getting it done. Even big firms with the right resouces can pound the pavement, do the research or build the quantitative system that generates returns. Don’t believe me? Read the article (link below) on Apollo, who did more deals in the first part of this year than their three largest competitiors put to work in the same period. Just because the managers you’ve seen thus far haven’t done it, doesn’t mean it isn’t being done.

So before you freak out about one of the topics above and eat an entire red velvet cake while standing at your kitchen counter (no judgement).

Before you decide that you should do away wholesale with your hedge funds, private equity funds, venture capital allocation, financial planner, mutual funds or your dating life.

Take a step back.


Sign off of because, honestly, any site that thinks the best reason for going on a date with someone is that neither of you smokes needs help with their dating algorithm.

And understand that you’re likely looking only at what you know, which may not help you as much as you’d like.

Sources: HFR,, Seward and Kissel,


This week, I decided to spare everyone my usual delivery of salty commentary on the investment arena and instead, use two pictures to say my 1,000 words.

So here's this week's blog in cartoon format. Of course, as badly as I draw and with the economic outlook uncertain, these may actually only be worth 500 (or even 5) words. But hopefully you'll get my general drift that:

  1. Asset managers can limit themselves by pursuing the biggest, splashiest and easiest to find investors, and
  2. Investors can limit themselves by not casting a wide enough net when looking for investments.

Oh, and apologies to Raiders of the Lost Ark...although maybe this attempt at spoofing humor will inspire you to watch it again. 

(c) 2016 MJ Alts

(c) 2016 MJ Alts

(c) 2016 MJ Alts

(c) 2016 MJ Alts

A few weeks ago, I attended an interesting and informative event on women and investing. One of the sessions was focused on how to increase gender parity within the investment industry. The discussion eventually coalesced around five key drivers of diversity in investments: Pipeline, Parenting, Presence, Pay and Promotion.

AuthorMeredith Jones

I was going through some old papers recently and, lo and behold, stumbled across my first grade report card. Since I’ve often struggled with authority figures, I opened it with some trepidation and discovered a few tidbits about the past.

  1. Much like many employers today, achieving a rating of “outstanding” was impossible by Mrs. Northem’s standards, and is likely the genesis of my overachievement urges.
  2. Grades were not merely the results of tests and homework, as they became as I got older, but a more nuanced measure of success.
  3. My teacher (and the ones that followed) seemed to actually like me, with Mrs. Northem writing “Meredith is an absolute joy. She has so much curiosity and interest.”

Now, as one of my friends of course pointed out, the end of that sentence could have been left off. He contends that my teacher merely stopped writing before she added:  “She has so much curiosity and interest…that I want to slap her.”

But still.

This little archeological gem made me start thinking about how we grade money managers. We all talk about their collective Grade Point Average (performance) but we tend to get stalled after that.

For example, consider the headlines that of late argue hedge fund managers have generated poor performance, particularly relative to their fees.

What does that mean, exactly?

Let’s assume that means that the average hedge fund has essentially a “C” GPA. If there are five funds (because the math is easy), what grades did each fund make?

  1.  3 A’s and 2 F’s
  2.  3 A’s and 2 D’s
  3. 4 B’s and 1 F
  4.  5 C’s
  5. 4 C’s and 1 D

For some reason, financial pundits seem to think the answer has to be either 4 or 5, when, in fact, every combination of the grades above would generate that C average.

While certainly Garrison Keillor can’t be right when he quips “all our children are above average,” it is important to remember that when we talk about average performance some funds, potentially a great many funds, will have performed above that average, while others will have performed below the average. It’s math, y’all.

But before we even get too tied up in our numeric underpants, let’s also consider that the “grades” we give our managers are not as simple as a single performance number.

Just like my reading “grade” was comprised of understanding, reading aloud, attacking new words, interest and writing, in which I earned “D”oes good work across the board (with the exception of writing…I’ve always had the handwriting of a serial killer), how we measure managers is, or should be, comprised of a number of different factors.

  1.  Did the manager perform as expected? Not every manager or strategy will perform well in every market. If, however, the fund performed as we expected given the prevailing market and strategic considerations, that should be taken into consideration. For example, marking down a short seller for not generating eye-popping positive returns during a raging bull market is insanity and a push towards style drift.
  2.  Is the manager taking the risk I expect him to take? If a fund manager starts taking increasing risk with your capital as they chase some illusive performance benchmark, that’s more cause for concern in my book than underperformance.
  3. Does the manager communicate effectively? Do you have sufficient transparency and frequent updates so you can evaluate how you feel about items 1 and 2?
  4. How does the manager’s performance fit into my overall portfolio? No fund is an island, but is instead part of an overall asset allocation plan. Managers and strategies should contribute when you expect them to (see above), but again, constant outperformance is more of a myth.

Perhaps because much of the media doesn’t get the full picture, or perhaps because, like me, they’re a bit removed from their old report cards, too many folks become entirely too fixated on manager GPA. Unfortunately, that leads those less familiar with investing to potentially make decisions based on this all-too-linear thinking as well, perhaps even ignoring investments that could have a positive impact on their overall portfolio because they are “bad.”

And that’s really the shame, here. Because if we look behind the manager “grades” we would see that many investors, two-thirds in fact, believe their hedge fund investments actually met or exceeded their expectations in 2015, according to Preqin data.

Which means that either more than half of our industry suffers from the “Lake Woebegone Effect” (all my managers are above average) or there is more to the story than simple average performance.

As someone who “D”id good work with numbers, even back in 1978, I’m betting it’s the latter. 

Please note: My blog is now published on the first and third Tuesday of each month. 

AuthorMeredith Jones

I’m a crazy cat lady. Those that know me well in the industry are already clued into that fact. Those that don’t know me well probably at least suspected it. After all, no one can be this sarcastic and inappropriate without spending an inordinate amount of time by herself.

What folks may not know is I am, in fact, a total bleeding heart when it comes to any animal. I have stopped my car to rescue skunks, turtles, dogs, and cats. I have nursed injured geese and mice. In fact, just before Christmas I found homes and no-kill shelter placements for 48 cats that a even crazier cat lady was hoarding in her BFE, Tennessee trailer.

So imagine my outrage when the story broke about a baby dolphin that died after a bunch of total effing morons passed it around on the beach for selfies.

Come. On.

I was so pissed I stomped around the house blathering on (to myself and to my three cats) about how stupid the entire human race has become and how this is all a sign of the total end of civilization, which I am sure some idiot will capture on a freaking GoPro.

And then I started to calm down. I did what those of us who work with causes have to do so often when confronted by things too horrible to imagine. I breathed and I began to think about all of the people that I know who do good things for the world. How private equity veteran Jeremy Coller is a vegetarian and a champion for farm animal welfare. How 100 Women in Hedge Funds raised more than GBP550k for children’s art therapy. How one of my favorite seeders and one of my favorite family office guys both do volunteer work with wildlife and schools in Africa every year.

As a level of sanity returned, I remembered a quote from the existential masterpiece Men In Black: “A person is smart. People are dumb, panicky dangerous animals and you know it.”

I needed to re-focus on persons. Not people.

All too often, however, we tar a person with our people brush. Sometimes it’s well deserved (not to mention a time saver), but most of the time we find that there are exceptions to every rule.  And while it’s hard for most of the public to imagine them as individuals, this is also the case in the world of alternative investments.

Let’s consider some of my fave hedge fund “you people” themes:

Hedge Funds Keep Getting Crushed – Sure, most index providers show hedge funds started the year down more than 2% on average, but that means some funds did worse and…gasp….some funds did significantly better. Hopefully you saw some of the latter in your own portfolio, but if not, Business Insider proves this point with this handy article.

Hedge Funds Charge 2 & 20 – In their study “All That Glitters” Elizabeth Parisian and Saqib Bhatti conclude that pensions pay roughly $81 million in hedge fund years per year, amounting to roughly 57 cents on every dollar of profit. In December 2015, Eurekahedge reported that average hedge fund performance fees last touched 20%  in 2007, while Citibank reported that management fees were, on average 1.59%, with an operating margin of 67 basis points. I’ve seen several funds launch of late with either no management fee or zero performance allocation. And what we’re talking about? They are just the headline fees. Most managers, roughly 97% the last time I polled them in 2013, were willing to drop fees for large investments. That’s a whole lot of persons charging less than “those people.”

Hedge Fund Billionaires – Google “hedge fund billionaire” and, if you’re like me, you’ll get 131,000 results in about 0.57 seconds. Of course, what’s interesting about that fact is it is probably roughly 130,500 hits higher than the actual number of hedge fund billionaires. If one assumes that all hedge fund managers with AUM over $1 billion are, in fact, billionaires (a stretch if I’ve ever heard one), then that leaves roughly 9,500 hedge fund managers who are not billionaires, unless they secretly won the family inheritance or actual lotteries. That’s a pretty unbalanced barbell on which to base any kind of income assumption. And of course, that doesn’t take into account that a hedge fund manager, even a Big Billionaire Hedge Fund Manager, can lose money for the year if they don’t achieve profitability for their clients.

At the end of the day, as my former boss, George Van, used to say, “hedge funds are as varied as animals in the jungle,” and boy, is he right. And whether we want to believe it or not, hedge fund managers are individuals first, and “those people” second.

The moral of the story? Generalizations are generally not your friend. They make you mad. They make you sad. They may make you ignore investment options based on public opinion rather than facts. Instead, take a moment to slow down and individualize. Unless I find out you took a selfie with that dophin, in which case, I suggest you speed up and use your head start. 

A tragic thing happened to me last week. I was (gasp!) ma’amed.

No, not maimed. Ma’amed.

While dealing with a very unfortunate chimney repair at my humble Nashville cottage, my two, rather incompetent, repair technicians called me ma’am. Not once. Not twice. But 37 times in one conversation.

It was like having a cold dose of mortality thrown in my face.

Even though I still have the sense of humor of a 12 year old, being ma’am bombed let me know that I have officially hit middle age, which coincidentally may also explain why my “give-a-damn” broke about two years ago as well. They do say, after all, that only little kids and old people tell the truth.

But my brush with ma’am-dom did make me start to think about how the investment industry may change going forward, what with a heaping helping of Millennials headed our way. After all, according to a 2014 Millennial survey by Deloitte, the next generation will comprise 75% of total workforce by 2025. Boomers and Gen X – gird your loins.

Changes That May Be A’Comin’

1)   Socially Responsible Investing Will Surge – Although percentages vary from survey to survey, and between income groups as well, one thing is very clear: Millennials are much more open to socially responsible investing than prior generations. In one study of high net worth investors’ attitudes towards socially responsible investing, nearly half of Millennials considered social responsibility when making investment decisions compared with a mere 27% of seniors. In a study of all investors, Morgan Stanley’s Institute for Sustainable Investing found Millennials to be more than 10 percentage points more likely to favor sustainable investing than their Boomer counterparts.

(C) 2016 MJ Alts. Data Source Morgan Stanley Institute for Sustainable Investing

(C) 2016 MJ Alts. Data Source Morgan Stanley Institute for Sustainable Investing

This attention to social factors is likely to boost both the number of products launched to pursue some form of socially responsible investing (ESG, Impact, Mission, Socially Responsible, etc.) and to simultaneously increase the demand for said products. As of year-end 2013, one out of every six dollars invested in the U.S. was already invested in SRI strategies (according to the US SIF Foundation), but it is safe to assume that the demographic shift will accelerate this trend.

The upshot? You might want to get ahead of this trend sooner rather than later.

2)   Our Historically Paper and PDF Industry Will Evolve – As luck would have it, I had not one, but two chances to feel old last week. I was speaking with a friend of mine who was extolling the virtues of Tinder. She loved the speed of the “dating” service and the ability to judge people quickly. I then lamented that I missed the days of a good old personal ad.

“You mean like” she asked.

“Um, no,” I said. “ I mean like the ones that were in the paper and alternative news in Nashville. You know, Single White Female, blah blah blah…”

“Oh!” she exclaimed. “You mean like on Craigslist.”

“Noooooo,” I said. “I mean printed, paper singles ads. My favorite appeared in the back of the Nashville Scene one day and read ‘Single White Male, fat, ugly and bald, seeks Asian women with long toenails.’ People had to be creative and witty and not just post shirtless bathroom pictures….”

She blinked at me blank-faced in response.

Most Millennials don’t know a world without the Internet or iPhones (or as I like to call them, secular rosaries). Instagram, Pinterest, Twitter, Uber, AirBNB and all sorts of social and disruptive technologies have been at their fingertips (literally) for most of their lives. I can only hope that this comfort with technology leads to some revolution in the investment industry, which has long been dependent on pitch books and PDF one-pagers. I’m not sure what the answer is for this (and God save us from a Tinder app for investments where appearance is everything and substance & due diligence are lost), but there has to be some better ways of doing things than the way it’s been done for the nearly 18 years I’ve been in this space.

3)   The Traditional Pathways to Fund Management May Evolve – Does anyone remember the kid that applied to 2,000 private equity firms last year in order to skip an investment banking stint? Have you read any of the many articles on how to get hired into private equity/hedge funds/ venture capital straight out of undergrad? What about the gig economy? Job hopping? Millennial requirements for work-life balance? No matter how you slice it, the bios of next generation fund managers are likely to look pretty different than what we’ve grown accustomed to in the past.

I’m sure there are plenty of other ways that the industry may evolve in the next 10 years or so, but you can bet I’ll be ruminating on at least these possibilities going forward. At least until the re-release of Pretty In Pink hits theaters next weekend. I’ll be hanging with Duckie that day.

AuthorMeredith Jones

Because of the research I’ve done on gender and investing, and, let’s face it, because I am an opinionated and often colorful commentator on all things investing, I get asked one question a lot.

What can we do to fix the gender imbalance in investing?

I think some people expect me to come up with a quick and pithy hack to fix the problem. Something akin to Ronco’s “Set it and forget it!”

It’s likely that some folks want me to utter the dreaded Q word (“quota”), although they should really know by now that’s just not how I roll.

A very, very few want me to say “there is no problem” so they can get back to other matters.

But almost no one really wants to hear the truthful answer to the question, which is this: “I’m not sure what the answer is.”

One thing I am positive about is that the answer is as complex as the problem, much of which is rooted in bias. Now this is not necessarily your grandparent’s or even your parent’s bias. Thankfully the days where consumers were likely to be treated to an ad like this are gone. 

But if you are human, you have bias. Period. And here’s how those biases (both men’s and women’s) might be impacting the number of women in investing:

It Starts Early – A study by Jane Stout, Nilanjana Dasgupta, Matthew Hunsinger, and Melissa A. McManus of UMass Amherst found one of the reasons women may not pursue math is rooted in bias. When faced with a male math professor, 11% of women attempted to answer questions posed to the class at the beginning of the semester. At the end of the semester, that number dropped to 7%. In contrast, female students only attempted to answer questions posed by a female professor 7% of the time at the beginning of the semester, but attempted to answer 46% of the time by the end of the semester. Similar trends were shown in other areas of the classroom experience, including after class requests for help, confidence and test taking ( With less than 1 in five math & science professors at top universities women, it is easy to see that the pipeline could narrow early.

The Pipeline Shrinks Further - In 2014, only 37% of MBA applicants were women, and of those, only 6% pursued investment banking compared with 11% men in that field. Also in 2014, 77% of investment analysts were men, who were 20.3% more likely to get an early analyst offer than women. A 2011 Vault study of the largest investment banks in the US found only 25% of staffers were women, 11% of executives were women and only 3% of CEOs at these firms were women per Catalyst. While it is difficult to single reason for these low numbers, culture, mentorship, appeal, and a lack of role models likely all come into play.

Hiring Hurdles – Early last year, Marc Andreessen took copious amounts of, um, “poop” for stating that he has no female partners at his firm because he’s tried to hire one and each time she turned him down. Obviously, there must be more than one qualified female applicant out there, so why isn’t a venture capital magnate like Andreessen seeing them? Part of may spring from the bias in the hiring process.

A study published in the American Psychological Association called, “Evidence That Gendered Wording in Job Advertisements Exists and Sustains Gender Inequality” showed that subtle word choice differences in job postings impacted who responded to those postings. For example, the following ad ( was re-written with feminine and masculine themed words. The feminine ad, perhaps not surprisingly, attracted more women applicants. Now think about the ways we tend to describe asset managers and perhaps it’s not so mysterious why the pipeline has historically sucked. 

Assuming that women do apply for an investment role they have to make it through the resume gauntlet. A recruitment firm created a resume and sent it to 1000 hiring managers. Half of the resumes were attributed to Simon and half were attributed to Susan. At large firms, Simon was preferred over Susan 62% to 56%. Women hiring managers felt Susan matched 14 of 20 job attributes, while Simon matched six, and male hiring managers felt exactly the opposite. ( The upshot? Bias, bias everywhere.

Promotional Considerations – If women do enter the investment arena, they then still have to work their way to the top. Even workplaces like Barclays Capital, who just shared they now employ more women than men (51% to 49%) struggle when it comes to women in the C-suite: 80% of top level positions at Barclays are held by men. The list of potential reasons for this are endless, but a great list can be found in this article,, which details the biases women face when climbing the corporate ladder. Chief among them? Mommy track, networking opportunities, participation in meetings (air time, interruptions), expressing displeasure, etc.

At the end of the day, it is supremely difficult to find a simple fix to these issues. Unconscious bias is, in a way, more difficult to deter because it’s, well, unconscious. These behavioral patterns are pretty inaccessible to the conscious mind and therefore can be very difficult to change.

However, for those firms that are looking to improve their diversity metrics, or those investors who are looking to improve their ratio of male to female money managers, it can be helpful to at least recognize where some of the issues arise and to take steps to guard against the biases where we can. For example, there is software that can create “gender neutral” job postings. Blind resumes can help avoid the Simon-Susan conundrum. Having mixed teams of interviewers can help to balance male and female hiring and promotion biases. Groups like Rock the Street Wall Street ( and Girls Who Invest (http://www.girlswhoinvest.orgcan help young women overcome their own biases towards math and finance. Certainly, there are a lot of changes required, but they could potentially add up to better gender diversity over time. 

To be clear, no woman I know is asking for special treatment when it comes to hiring of any kind (employment, fund selection, etc.). Every single woman with whom I speak wants to earn their place in investment management and is willing to get scrappy when required. But, in the immortal words of Paul Simon, women do want to know that the “cross is in the ballpark.” Until we can all figure out how to mitigate some of our biases, that may be hard to ensure. 

Sources: In addition to those cited throughout - Graduate Management Admissions Council, Universum,

AuthorMeredith Jones

As y’all recover from the excesses of fried turkeys, stuffed stockings, too much ‘nog and an overdose of family time, it seems like a good time to catch up on some light reading. So, in case you missed them, here are my 2015 blogs arranged by topic so you can sneak in some snark before you ring in the New Year.

Happy reading and best wishes for a joyous, profitable, and humorous 2016.

Happy Holidays from MJ Alts!

Happy Holidays from MJ Alts!








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