Seema Hingorani has been on a mission to solve a problem that became glaringly clear while she was chief investment officer of the New York City’s retirement systems: A dearth of women on the investment teams of the money managers vying for the city’s business.
Asset managers decried a pipeline problem, while women on college campuses knew little of the industry—or worse, had a negative view of it. Hingorani, who began her career as a T. Rowe Price analyst, set out to fix the problem, founding Girls Who Invest in 2015. The nonprofit built a 10-week summer program that teaches college women core finance skills, like constructing valuation models, and bolsters their confidence and arms them with industry etiquette so they can crush the paid internship at an asset manager that is part of the program.
More than 500 women have completed the summer program, with about 80% staying in the investment industry. While the broader investment industry recruits from a handful of schools and has a dearth of minorities, the free program draws women from 60 colleges, with 70% women of color.
Barron’s recently spoke with Hingorani, who still chairs the nonprofit but is now a managing director at
Investment Management, on why it has been so hard to change the face of the industry and what more is needed.
It has been about six years since you founded Girls Who Invest. How do you gauge the progress?
We are still in the early stages. We are flooding the system with incredible talent and built an alumni community, not just for Girls Who Invest but our industry. Of course, I care about the first job but this is about the long haul. That is the only way [women] become more senior; we change the culture and women manage more money. We want to see women managing 30% of the investible capital by 2030, [from under 5% currently.]
How do you get retention?
It’s about how we help a woman who is an analyst, who has a great pedigree and is doing well and should be promoted, to become a portfolio manager. Why is that not happening? We know the biases and cultures at larger firms so how do we help get the woman who runs $100 million get to $1 billion. That is where we have to focus on the culture. It’s a reason I joined MSIM.
Often there is a hallowing out in the middle ranks. Why is that?
We have run research on why women leave [midcareer]. They feel they are doing well and love being an investor and their firm and want to get to the next level. Unfortunately, they start to think they aren’t going to get that next stretch [opportunity] and have the same access. They look up and around and they don’t see women. If they are working hard and it isn’t going to happen, then they would rather spend time with their family—and that becomes the tag line.
I’ve been having conversations with leaders of our firm on how we decide who gets the next stretch assignment, how we think about performance reviews and how we pay people. That is where most get uncomfortable and it gets hard. The only way [for change] is to work and join with great men in the industry. But making money for people is also uncomfortable.
What are you doing at Morgan Stanley to address this?
We just kicked off a junior investment development talent program. We decided to focus on our younger investment talent that is craving collaboration. There are two primary goals: How do we help [those with] one to six years of work experience become more productive, more creative and better investors—and happier, which gets at retention. We measure that.
How do we create collaboration across asset classes?
If I’m not talking to my private equity counterparts as companies are staying private longer, I wouldn’t’ be a good public equity investor. It creates team projects and building a community. That should ultimately increase alpha generation and helps retain and manage great talent.
Are you worried about the scars left by the pandemic on women who have dropped out of the workforce?
All the stats are super troubling. In about a year and half, we have taken ourselves back 30 years in terms of participation in the workforce.
In our industry there are some things that could be a silver lining. The investment management industry has been very skeptical that you can take care of clients, manage portfolios and generate great returns by working from home. Mostly it has been women in our industry working from home and we were penalizing them. But now, we have proven pretty significantly that as an industry we can do this; we can have a hybrid situation. I don’t think it’s going to be a stigma for women who work from home.
What helped you climb the ranks in the industry?
For me, life has been all about relationships. It was never about the next stock trade. Thinking this way has helped me in my career. This is a very small industry and very much a relationship business. Every position in a portfolio is built on relationships to get information from companies, understand management teams and see where there is value. I learned from great mentors and sponsors—and they were all men.
What’s your advice to those just starting out?
Don’t worry about collecting business cards. Just go find that one person where you can make a connection—whatever it is: You grew up in the same town, played a similar sport, have the same background. If you make that one connection, when you ask them for their card or email, they will email you back. When an article you read reminds you of a conversation, send them the link.
There are even fewer women in alternatives like hedge funds where you spent some of your career. Why?
Some of it is that it’s easier to get your mind around and understand stocks. Most people have a stock portfolio and are even seeing [the trend] with Robinhood.
When I was coming out of business school, I didn’t interview at any hedge funds because in my head I had the idea that hedge funds were “shoot from the hip” type of cowboys, not long-term fundamental thinkers—probably from reading about a few of them.
Then there is an element of [it being] an industry that started with white men who hired people who looked like them and went to the same clubs. Young women looked at that and said there isn’t a place for me. It becomes self-fulfilling. You have to break that. We have to get folks meeting more people, which is why we set up a speaker series because I wanted them to see the incredible women and men in the industry.
Often when fund consultants talk to institutional investors, they look to allocate money to women-run funds as part of a niche allocation. When is that going to change?
We need to expand the way we think about funds and view risk—such as looking for a three-year record or a certain assets under management. Actually, you want to get in when they are smaller and more nimble. We have seen a lot of research—that shows performance is better in earlier years [of a fund]. But big pension funds never get in early because [they] wait until a fund is up and running and charging us X percent. [They] never get to find emerging leaders of the business.
It’s similar to recruiting. Why would you narrow your talent opportunity? When you are trying to build a portfolio of managers as a big asset owner, why wouldn’t you think the same way? I’d rather go where others don’t.
Write to Reshma Kapadia at [email protected]