44 BUSINESS DAY
Friday 17 May 2019
FT
NATIONAL NEWS
Women-led hedge funds try to crack the boys’ club Female asset managers struggle to attract investments even as they outperform their male peers
LINDSAY FORTADO
W
hen she launched an event for female hedge fund managers seven years ago, Tracy Castle-Newman, a managing director at Morgan Stanley, struggled to find any. “I ended up with about 10 people,” she said. The ratio of women to men working in the industry is one of the most lopsided in all of finance. Last year, 19.3 per cent of hedge fund employees were women, up from 18.6 per cent in 2017, according to the data provider Preqin. That conceals an even greater imbalance when it comes to people making investment decisions: 48 per cent of the funds’ investor relations teams are women but in portfolio management it is only 10 per cent. And among those actually running funds, women are even rarer. Jamie Zimmerman has been running her event-driven fund since 2000, though its current assets — about $169m, according to regulatory filings — are down from a peak of $3.4bn in 2014, according to Bloomberg. Leda Braga has overseen Systematica, which trades using computer algorithms and manages about $8.6bn, since the start of 2015, when she spun out from BlueCrest Capital. One of the more high-profile women in the industry, Samantha Greenberg, closed her fund, Margate Capital, earlier this year to join Citadel. Yet finally there are signs of an infusion of women at the top. Six years after Morgan Stanley’s inaugural event, the number of female managers attending the bank’s Women’s Investment Roundtable had tripled. For the first time ever, many of the highest-profile hedge fund launches this year are led by women. They include: Impactive Capital, an activist investing fund run by Lauren Taylor Wolfe; Snowcat Capital, an alternative risk premia fund run by Rebecca Pacholder; Bayberry
Capital, a long-short equities fund run by Angela Aldrich; and Martlet Asset Management, an alternative risk premia fund run by Jane Buchan. The latest batch of new launches comes at a time when most portfolio managers are struggling to strike out on their own. The number of new hedge fund start-ups fell to their lowest level since 2000 last year, according to HFR. To get to launch, women have to overcome a higher hurdle than men even though they tend to perform better, according to a 2015 study by Northeastern University. “I think all the evidence is really solid on the fact that, for women, you have to outperform by more to build the same kind of business,” said Ms Buchan, who was most recently the co-chief executive of Paamco Prisma, one of the largest fund of hedge funds in the world. “And the outperformance can be as much as 100 basis points . . . That’s saying that something’s wrong with the capital allocation process.” “One of the problems is there are a lot of biases that people have in their head,” she added. “The issue is going to be, are [allocators] willing to do this or not? There’s a lot of talk, but not a lot of action.” Ms Buchan has attracted $100m of assets for her fund. Ms Taylor Wolfe launched Impactive Capital alongside Christian Asmar with an anchor investment of $250m from the California State Teachers’ Retirement System. Ms Pacholder raised $100m and her former boss Leon Cooperman of Omega Advisors has said he would be a “substantial” investor*. All four funds are currently fundraising. Yet the amount being raised by the female fund managers is still markedly lower than some of the recent headline launches led by men, who often start with more than $1bn in capital. In the largest hedge fund launch ever, Michael Gelband, the former head of fixed income at Millennium Management, started ExodusPoint with $8bn last year.
US sets course for its next Middle Eastern war of choice Dick Cheney’s heirs are laying the groundwork for an Iran conflict
EDWARD LUCE
D
ick Cheney, the former US vice-president, said that if there was a 1 per cent threat of something happening, America should act as if it were a certainty. By that yardstick, the chances of a US war with Iran are now flashing red. Any such conflict could induce a geopolitical earthquake to exceed what followed the US-led invasion of Iraq. That war unleashed Isis, empowered Russia and China, and left a bitterly divided America roughly $3tn worse off. In the first Gulf war in 1991, the US led a broad international coalition. By the second one in 2003, the “coalition of the willing” had shrunk to Britain, Spain, Australia, Poland and a handful of Pacific islands. This time, the US would be fighting without any non-Middle Eastern allies. In the spirit of Mr Cheney, the US should bear in mind parallels between the build up to the Iraq war in 2003 and what is happening today. Much like then,
today’s case is led by two highly skilled insiders. John Bolton, the national security adviser, and Mike Pompeo, the secretary of state, are worthy heirs to Donald Rumsfeld and Dick Cheney. They know how to marshal intelligence for their ends. Each claims that Iran is stoking its proxies in Iraq, Syria, Yemen and Lebanon for imminent attacks on the US and its allies. They have withdrawn non-essential US personnel from Baghdad and ordered the USS Abraham Lincoln aircraft carrier and a bunch of B52 bombers to the region. America would respond with “unrelenting force” to any Iranian attack, said Mr Bolton. US retaliation would be “swift and decisive” says Mr Pompeo. All that is lacking is clear intelligence to back them up. Chris Ghika, the British major-general who is second-in-command of the US-led anti-Isis coalition, said on Tuesday there was no evidence of an increased Iranian threat. He was slapped down by a US spokesman. www.businessday.ng
Protesters outside military headquarters in Khartoum after clashing with security forces on Wednesday night © AFP
Sudan talks suspended after further clashes with security
Alleged attacks on democracy protesters disrupt efforts to secure final deal on civilian rule STEVE JOHNSON
M
ilitary leaders in Sudan halted talks on a final deal for a return to civilian rule after parts of the security forces clashed with protesters in the capital Khartoum for the second time in a week. “We decided to suspend the negotiations over civilian rule for 72 hours to help prepare an atmosphere for completing the deal,” Lieutenant General said in a televised address in the early hours of Thursday morning. Lt Gen Burhan’s transitional military council has run the country since ousting President Omar al-Bashir in April after four months of demonstrations against the ageing autocrat’s 30-year rule. On Wednesday, the military council and the opposition movement that spearheaded the protests, the Declaration of Freedom and Change Forces (DFCF), said they had reached an agreement for a three-year transition to a fully civilian administration and that they hoped to sign a deal within 24 hours.
The DFCF said the suspension of the talks was “regrettable.” The decision was taken after security forces clearing barricades in parts of Khartoum clashed with pro-democracy demonstrators on Wednesday evening. Protesters said the military fired live ammunition, injuring at least 14 civilians, but that figure could not be verified. Despite the talks’ progress, the violence has continued because the Sudanese armed forces are fragmented and different factions have different agendas, experts said. “The transition is going to be a bumpy road,” said Ahmed Soliman, an expert on Sudan at Chatham House, a UK think-tank. On Monday, at least four people were killed in what the opposition movement said was an attack on protesters by members of the Rapid Support Forces, a former militia headed by the military council’s second-in-command, Lieutenant General Mohamed Hamdan Dagalo. Integrated into the armed forces by President Bashir in 2013, the RSF
has since vied with the army and the intelligence services for power and influence. Protesters also blamed Wednesday’s violence on members of the RSF, according to local press reports. Lt Gen Burhan tried to shift blame away from the military, accusing demonstrators of “provoking” security forces and disrupting life in the capital. There was an “infiltration of armed elements among demonstrators who were shooting at security forces”, he said, according to Al Jazeera. The military council instructed the protest movement to dismantle all roadblocks before the talks could resume, although the demonstration outside the Ministry of Defense — now in its fifth week — will be allowed to remain “We will continue our sit-in at the leadership headquarters and all other sit-in fields across the country,” the DFCF said in a statement. “Our peaceful protests will continue until we expose and isolate the forces of anti-revolution”
Airbnb appoints former Burberry boss Angela
Former Burberry chief left Apple in February after 5 years running its retail stores SHANNON BOND
A
irbnb has appointed Angela Ahrendts, the former Apple retail head and Burberry chief executive, to its board, as the company best known for short-term rentals seeks to become a fully fledged travel brand. This is the first new corporate position for Ms Ahrendts since she left Apple in February after running its retail stores for five years. The tech group had hired her at a time when it was trying to reposition itself as a luxury brand with the launch of the Apple Watch and establishment of partnerships with Hermes to sell its wearable device. Ms Ahrendts touted Apple stores as “town squares”, emphasising community events, and expanded the iPhone maker’s footprint to new cities and countries — although the changes left some Apple customers unhappy about wait times and customer service quality. She previously ran Burberry for eight years, where she was credited with reviving the British fashion brand by winning over younger consumers through digital marketing and improving the in-store experience.
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“Angela has a reputation for pushing brands to dream big, and she told me that’s exactly what she hopes to bring to Airbnb’s board,” said Brian Chesky, Airbnb chief executive and co-founder. “She has led global brands through transformation, completely redefined the retail experience, and done it all while putting customers and communities first.” Her appointment as a non-executive director comes as Airbnb is seeking to become a full-service travel provider, and gearing up for an eventual initial public offering. In recent years, Airbnb has been expanding beyond its original business of connecting people with rooms to rent in homes. The site now also offers travellers luxury listings, boutique hotels, sightseeing activities and transport. “I am elated by the opportunity to join Airbnb’s board of directors at this important phase on the incredible journey of the company and its community of hosts and guests,” Ms Ahrendts said, noting that she has known its co-founders — Mr Chesky, Joe Gebbia and Nathan Blecharczyk — for years. Airbnb is hoping her experience building global brands will be a boon @Businessdayng
as it eyes international growth, and new sources of revenue and customers. The San Francisco-based company made its biggest acquisition to date in March, with the purchase of the hotel booking site HotelTonight. It also recently invested at least $100m in Oyo Rooms, the SoftBank-backed Indian hotel franchise, and has announced plans to develop luxury apartments in partnership with one of New York’s biggest real estate groups. At the same time, Airbnb is seeing increased competition to its core business from publicly listed rivals Bookings Holdings and Expedia. Last month, Marriott International, the world’s largest hotel operator, launched a “Homes & Villas” platform promising to offer more than 2,000 homes in 100 destinations across Europe, the US and the Caribbean. Ms Ahrendts, who also sits on the board of Ralph Lauren, becomes Airbnb’s third independent director alongside Ken Chenault, the former American Express chief executive, and Ann Mather, a former executive at Walt Disney and Pixar. She is the second woman on the board, following a pledge by Mr Chesky last year to add more female directors.