Bidiversity

Hedge funds run by women have fallen half as much during the recent financial crisis as those managed by men, according to Hedge Fund Research, a Chicago firm. That bodes well for Zoe Cruz, who, ousted as co-president of Morgan Stanley almost two years ago, is preparing to start her own hedge fund, reportedly currently hiring employees for her Voras Capital Management.

The findings were showcased in a research paper presented at the Women’s Forum for the Economy & Society in Deauville, France, over the weekend.

As guardian.co.uk reported, “the value of female-managed funds dropped by 9.6% in the past year, compared with a plunge of 19% for the rest.”

“Women investment managers also performed better in general over the past decade, with an average annual return of just over 9%, while hedge funds overall delivered 5.82%,” according to the article.

Hedge Fund Research’s “diversity index” tracks the performance of other minority groups along with women. Funds run by women accounted for roughly 50% of the index, which returned an average of 8.21% a year since 2003, compared with 5.98% for the field as a whole.

The idea that the performance of investment firms improves when women are involved is a topic The Deal spoke about recently with Sharon Vosmek, the CEO of Astia, a nonprofit group that nurtures women-led high-growth businesses.

“We know what it takes to get more diversity into the portfolio,” said Vosmek, citing research results soon to be published. “We don’t know exactly how or why it does this, but we do know that VC firms with at least one woman in the partnership are 70% more likely to have a woman-led company in their portfolio.”

“We know that a diverse group almost always outperforms even the best homogeneous groups by a wide margin,” said Vosmek, pointing to several studies, including a 2007 Catalyst report that found that Fortune 500 companies with the highest representation of women board directors attained significantly higher financial performance, on average, than those with the lowest.

Source: The Deal,com