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Kathleen Kelley’s rise in the male-dominated hedge fund community seemed as inexorable as it was unusual. After earning a master’s degree in econometrics and quantitative economics from the London School of Economics and Political Science in 1986, Kelley worked as an economist at the Federal Reserve Bank of New York, then landed a job at renowned hedge fund firm Tudor Investment Corp. in 1990. “We hired Kathleen as a young macro analyst and encouraged her to start trading,” recalls firm founder Paul Tudor Jones II. “As one of her early mentors, I saw in her the tenacity, focus and work ethic that define potential success in this industry. Kathleen took the opportunity and ran with it.”

As the first — and for years only — female portfolio manager at Tudor, Kelley spent a decade as a macro trader, focusing on fixed income, foreign exchange and commodities. She says she was up in eight of her ten years and posted a gain of more than 50 percent in 1998. “Given Paul’s background and active interest in commodities, I always tell people I learned commodities sitting outside Paul’s office,” she says. She left Tudor in 2001 to work as a macro strategist at hedge fund firm Vantis Capital Management, then jumped to Mark Kingdon’s Kingdon Capital Management in 2005 to manage a macro portfolio with a commodities theme.

After six years Kelley resigned to spend time with her children, moving to London for a year. There she hatched a plan for a bold comeback, as founder and CIO of her own hedge fund firm. In 2012 she returned to New York and launched Queen Anne’s Gate Capital Management, a global macro firm with a commodities focus, named after the tony street just off London’s St. James’s Park where she had lived. “I knew I had to try,” she explains. “I had spent my whole career focused on macroeconomics and commodity markets, and I felt that there should be more women running their own firms.”

By the time the firm opened, though, commodities prices were already past their peak. Two years later they started to plunge, taking Kelley’s ambitions down with them. In late 2014 she shut down the fund, which had $115 million in assets at its peak. Kelley, now a senior commodities consultant at BlackRock in New York, blames the commodities slump and a challenging postcrisis capital-raising environment for her firm’s demise. “The timing was not ideal,” she acknowledges. “If I were to do it over, I probably would have launched later, when I had a bigger AUM.”

Every fund manager’s story is unique, but Kelley’s tale mirrors a broader trend. Just before the 2008 global financial crisis, some determined women were beginning to enter the upper echelons of hedge fund management. But in the following years progress stalled. Although many women who launched funds before 2008 remain successful, their numbers have not increased significantly, and some, like Kelley, have seen their firms founder.

According to a March 2015 report by alternative-assets data provider Preqin, women hold only 10.3 percent of C-suite positions at single-­manager hedge funds and 11.1 percent at funds of hedge funds.

A number of factors explain the low numbers, industry executives say. The financial crisis caused a shakeout in the hedge fund industry, and a stretch of mediocre performance in recent years has led many investors to cut back their hedge fund exposure — the California Public Employees’ Retirement System and the New York City Employees’ Retirement System have decided to get out altogether — or concentrate allocations among fewer firms. Those forces are making it harder for new managers to break into the business. And for most women it’s harder to get started or reach the top tier of the hedge fund industry than it is for their male counterparts — in any climate. They are underrepresented in many of the key precursors to hedge fund success, such as MBA programs. They often lack the deep network of connections that can spell the difference between success and failure. Some studies have shown that women hedge fund managers have a harder time raising money than men do and need to perform better to survive.

“Since the crisis it’s been very hard for newer firms,” says Tracy McHale Stuart, CEO of Corbin Capital Partners, a $4.5 billion fund-of-hedge-funds firm in New York. “The biggest issue is the supply — recruiting women into the industry. We continue to see so few women.”

Marcia Page, who will step down later this year as CEO of Minneapolis-­based Värde Partners, believes it’s more difficult for new players, particularly women, to break into the business today than it was when she helped found the now-$10 billion distressed-debt firm in 1993. “It’s been so clear that since 2008 fundraising has been challenging even for the more established funds as due diligence has intensified,” says Page, who will stay on at Värde as chair. “New funds are at a disadvantage, as you literally have to knock off an incumbent manager to take their place. I would have expected the pipeline for women in finance to be significantly deeper than it was 30 years ago, but that isn’t the case.”

To be sure, there are female success stories out there. Last year star quantitative manager Leda Braga branched off from BlueCrest Capital Management and set up her own firm, Geneva-based Systematica Investments, to run her $10.2 billion BlueTrend managed-futures strategy. Last month Braga was No. 44 on the 2016 Rich List of Institutional Investor’s Alpha, with earnings of $60 million. It was the first time in 15 years that a woman had appeared on the magazine’s annual ranking of the 50 highest-earning hedge fund managers.

For most other women hedge fund managers, achievements have been much more modest, and they haven’t come easily.

Nili Gilbert and Valerie Malter got together in 2010 with Malter’s husband, Stuart Kaye, to launch Matarin Capital Management in Stamford, Connecticut. The team had plenty of Wall Street experience. Malter, who oversees the firm’s business operations, had logged 30 years at firms including J.P. Morgan Asset Management, Scudder Kemper Investments (now part of Deutsche Asset Management) and Invesco’s Chancellor Capital Management; her husband was a former principal and portfolio manager at Aronson+Johnson+Ortiz and head of research for quantitative strategies at Invesco. Gilbert was a former quantitative analyst at Invesco who had been recruited by Kaye in 2003 after earning an MBA from Columbia Business School. Gilbert and Kaye are responsible for the firm’s model development, portfolio construction and management.

The group had little in the way of backing and launched the firm’s first two funds in large part by raiding the individual retirement accounts of Malter and Kaye. The firm’s five principals, who include portfolio manager Ralph Coutant and client development director Marta Cotton, also used their own savings to build a reserve to last three years. “We set aside enough capital to make sure we were able to operationally support the business,” explains Malter. “Most funds don’t survive because they simply run out of money.”

Matarin started with a long-only fund at a time when a number of hedge funds were adding such strategies to their lineups, then launched a market-neutral hedge fund strategy. In August 2012 the firm reached a milestone, winning its first allocation — $5 million — from an institutional investor. Five weeks later the team was preparing a newsletter to announce the win when it got a deflating call: The consultant involved in the deal had just been fired. The allocation fell through. “We won and lost $5 million in five weeks,” Malter says.

But the partners persevered and gradually started winning clients, including allocations from Rock Creek Group, a women-owned global investment firm in Washington, and Progress Investment Management Co., an $8 billion firm that invests with small, rising fund managers. They also got a $100,000 Bridge to Business grant from the Robert Toigo Foundation, an organization that promotes women and minorities in finance. After four years they had reached the $250 million mark. Today Matarin manages $712 million for 21 institutional clients.

For Nancy Davis the key to getting off the ground was a differentiated strategy. She has an impressive pedigree, having spent seven years at Goldman Sachs’ proprietary trading group — a time-honored route to launching a hedge fund — rising to head of derivatives and over-the-counter trading. She then managed a $500 million global macro derivatives portfolio at Highbridge Capital Management, a multistrategy hedge fund unit of J.P. Morgan Asset Management, before doing a short stint as a global derivatives macro strategist at AllianceBernstein.

Determined to become her own boss, Davis founded Quadratic Capital Management in 2013 to run an options-based discretionary macro fund, something that set the firm apart from competitors offering garden-variety long-short equity funds. “In a competitive environment emerging managers need compelling attributes to even merit consideration by increasingly sophisticated allocators,” she says. Equally important was a September 2014 deal she struck with Ramius, the investment management unit of Cowen Group, under which the firm provided a reported $100 million of seed money in return for a 40 percent stake and extended its own operational, risk management and regulatory platform to Quadratic. With a distinctive strategy and solid backing, Davis was able to attract investors, including a $50 million allocation last year from the Illinois Teachers’ Retirement System that may grow to $100 million.

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