Diversification in action
“I don’t think of finance as a man’s world,” reflects Angela Rodell, CEO of the Alaska Permanent Fund Corporation (APFC), “I think of finance as male-dominated – but it’s not their world.”
It has long been understood that the best way to achieve the most stable, best performing, and sustainable investment returns is achieved through a diversified portfolio. It should not come as a surprise, therefore that diversified teams lead to better performance and enhance investment returns. One of the biggest challenges the investments industry faces is the lack of diversity, specifically, women in investment roles within the nation’s most prominent investment institutions. Diverse teams, including those with more women, bring different perspectives and new approaches to potential investment opportunities and help an institution successfully lead the way into new fields and changing markets.
According to a 2021 report by the Official Monetary and Financial Institutions Forum (OMFIF), women are CEOs at only eight of 72 sovereign wealth funds, and less than a quarter of those have any women in senior management or board level positions. Ranked number 3 globally by OMFIF for Gender Balance, APFC has made significant achievements supporting women in leadership, including 33% of our Board of Trustees, 50% in the C-suite, and several other high-level women directors and managers of departments and portfolios. This diverse group has posted APFC record level returns of 29.73% for the last year, beating all three of its board-mandated benchmarks for 3, 5 and 10 years.
Starting from within
To maximize returns for the benefit of their stakeholders, managers at many investment institutions are given the freedom to build their teams. Candidates with the most similar educational and sociological backgrounds are often chosen because of beliefs that they will create a more cohesive team. Raising awareness of our unconscious biases is the first step in starting from within.
APFC is committed to maintaining a diverse workplace, and our corporate culture starts with the individual personalities of our staff. We make a conscious effort to build teams that bring multiple views, experiences, and ideas while instilling our corporate values of integrity, stewardship, and passion.
“Some women may feel intimidated by the idea of investing,” says Sarah Clark, APFC Risk Officer; she encourages them to “throw away those fears and know that women who do participate can succeed, and succeed brilliantly!”
It is always easier to look for solutions elsewhere; however, APFC recognizes that these issues must be resolved without relying on outside mandates or rules. Successful change comes internally through our self-developed policies and attitudes.
Managers need to raise their self-awareness of potential unconscious bias and consider candidates who bring different perspectives from non-traditional backgrounds. Changes to hiring practices where gender-identifying references are removed from a resume and cover letter help more women make it through the initial screening process. These changes raise the possibility of lifting our corporate standards, building better and more diverse teams, bringing with them a wider array of skills, ideas and solutions.
Getting more women in the system earlier creates a conduit to ensure that ambitious and highly educated women experience the fulfillment of a career in the finance industry, which is crucial to ensuring they stay and grow in this field. Strengthened partnerships locally with the University of Alaska, Alaska Pacific University and our Alaska Native Corporations will help identify talented young women to participate in the APFC internship program with the goal of providing a career path for entry-level professional women which is nurtured.
“These investments will pay off when a woman becomes Chief Investment Officer,” says Rodell “by having a younger woman make her way through our corporation, we will have recognized our ultimate success.”
North of the Financial District
Once teams are hired, it is important to continue efforts to retain the diverse workforce that has been built. Young professionals benefit from mentors and peer groups, but also sponsorship. At APFC, some managers have been recognized for frequently empowering staff, including young women new to the industry. Sponsorship goes beyond mentorship by encouraging younger staff to lead projects and presentations, raising their profile in a professional setting amongst more senior colleagues. These actions have the dual benefit of proving the capabilities of a young professional and strengthening the confidence of the individual.
Throughout her career in finance and government, in New York and Alaska, Rodell says that on her way to the top seat at APFC, she didn’t experience explicit gender barriers to obtaining or excelling in her profession. This isn’t to say that it was easy or that she didn’t have support. The professional networks she experienced in New York and elsewhere do not exist in Alaska. Finding role models and mentors required recognizing the many different skills people offer and apply.
Retention of a diverse workforce also requires organizations to recognize the personal demands on staff and provide support outside the workplace. The pandemic inspired a shift in the physical location of staff at investment institutions, and APFC took advantage of the opportunity, adjusting within the changing landscape to focus on becoming more family-oriented. Ultimately, being a family-oriented workplace is not just about women. It is vital to create an environment that allows men to participate as well, encouraging them to take time off and contribute to their families outside of work. Having the vision to build a stronger team, the established trust and integrity developed within our corporation allow us to pursue this level of flexibility, knowing that performance will not be compromised in the work we do for Alaskans.
Finding a balance between being a responsible investor and raising a family is possible for women in this industry, says Masha Skuratovskaya, APFC Senior Portfolio Manager, “Women should cast a wide net and choose an employer that empowers them and respects their commitment to family, while having the additional benefit of being located near places and activities they enjoy.” For her, the deciding factor to come to APFC was the ability to grow professionally as a global bond manager, while living in the mountains and eliminating the nuisances like traffic and long commutes, that detracted from time spent with her children.
A prudent investment, women and diversity in finance
Women and men lead differently, act, think, negotiate, collaborate and plan differently. We need to include these varied perspectives to ensure a sustainable and diversified approach to investing. Starting within and encouraging men in the profession to encourage, mentor and sponsor women in decision-making positions will make the most immediate and meaningful impacts. Building the pipeline to bring more young women into the industry will generate the long-term real value in our corporation that we look for in investments across our portfolios.
“Women alone should not and cannot solve this problem,” says Rodell, “It’s a human problem and an industry problem to be solved collectively.” Having diversity in finance empowers us to include the most talented, brilliant and creative minds, men and women, to solve our greatest challenges and deliver the best possible outcomes for our stakeholders, or in the case of APFC, all current and future generations of Alaskans.