Gender Diversity Progress in Alternatives Flatlined in 2022

Hedge funds have emerged as the leader in gender diversity across all alternative investment sectors, according to Preqin.

Illustration by II

Illustration by II

Despite the growing emphasis on diversity, equity, and inclusion in the investment community, a new study indicates that the alternatives industry has made scant progress in achieving gender balance.

According to the latest report from Preqin, a firm that tracks the alternatives market, women account for only 21.3 percent of the total workforce in the alternatives industry, which includes hedge funds, private equity firms, venture capitalists, and real assets. That percentage is up slightly from last year’s 20.9 percent. The representation of women dwindles further at the executive level, where women make up only 13.6 percent of board members in the alternatives industry.

Hedge funds appear to have made the greatest effort to address gender diversity at all levels. While the proportion of women in the hedge fund industry’s workforce was just 19.3 percent in 2019 (one of the lowest percentages among alternative sectors), this figure has risen to 26.5 percent as of January 2023, surpassing all other sectors. Hedge funds also lead in the percentage of women occupying senior and investment roles, with 19.5 percent and 21.9 percent of those positions, respectively, held by women.

“The rise of large, woman-led hedge funds is a welcome shift in the traditionally male-dominated sector, where only a small percentage of the thousands of hedge funds are run by women,” the report said. For example, SurgoCap Partners, which was launched in 2022 by Mala Gaonkar and raised $1.8 billion in January, is now the largest hedge fund led by a woman. “This is an impressive accomplishment at a time when hedge fund launches are at their lowest since 2010,” the report said.

Women are the most underrepresented in private equity firms, where only 22.3 percent of all roles are occupied by women. The asset class has long lagged its private market peers in a variety of diversity metrics, including the percentage of women and racial minority employees.


Asset allocators have a more balanced female representation than fund managers. According to Preqin, women account for 24.4 percent of the total workforce at institutional investors such as pensions, endowments, and sovereign wealth funds. Institutional investors are usually larger and more transparent about their environmental, social, and governance policies, according to Jaclyn Bouchard, head of ESG solutions and corporate responsibility at Preqin.

Despite the lack of progress in gender diversity, the Preqin report noted that women are filling more newly created C-suite roles, such as chief analytics officer, chief marketing officer, and chief brand officer. Women also have a relatively higher representation in executive roles that involve finance and operations, according to the report.

But when it comes to making key investment decisions, women are still largely underrepresented across the various sectors. At private equity firms and real estate investment managers, women make up only 17.2 percent of the investment roles, the lowest figure among all alternative sectors. And even at asset allocators, only about 20 percent of the investment roles are held by women, compared with 30 percent in operations and nearly 40 percent in investor relations.

“The managerial positions we found women were in were very skewed away [from] investment decisions,” Megan Harris, lead analyst of the report, told II in an interview. “Just by being in more senior roles, which was fantastic to have, [doesn’t mean that] they were necessarily in positions like portfolio management.”

Still, Bouchard thinks that the newly minted executive roles are a great way to introduce more women to the investment industry. “[It] is probably the outcome of that general focus on getting more women into alternatives through various channels,” she said.