Dawn Fitzpatrick, 47, began her career as a preppy clerk on the American Stock Exchange trading floor. Last week, she began her new gig as chief investment officer of Soros Fund Management. Yes, that Soros. She is managing about $26 billion of Mr. Soros’ personal and family wealth.
Fitzpatrick was already among the most powerful women on Wall Street. This move makes her one of the most powerful people in finance. She was named to Business Insider‘s most powerful women on Wall Street in 2013, American Banker‘s 25 most powerful women in finance in 2015, and The Hedge Fund Journal‘s 50 leading women in hedge funds in 2015. That’s all very nice, but not necessarily a true indicator of her stature.
It’s a major milestone in a field in which women are far and few between in top leadership positions and are under-represented in the rank-and-file, too. According to a 2015 Morningstar study, less than 10% of all U.S. fund managers are women and women exclusively run about 2% of the industry’s assets and open-end funds. By contrast, men exclusively run about 74% of the industry’s assets and 78% of funds, with mixed-gender teams accounting for the balance.
It’s a reflection of the business world as a whole, only exaggerated because everybody knows the little ladies can’t handle money! Yet, studies by Credit Suisse Research Institute, McKinsey & Co., CSRI and Catalyst show that companies with more women on their boards have better financial performance than those with fewer or no women.
And in the actively managed investment fund business, female managers tend to outperform their male peers. Bloomberg’s survey of the research found that several academic studies (see this, this and this) conclude that women have better performance—on both an absolute and a risk-adjusted basis—than their male counterparts do. Some studies in Europe haven’t found a gender performance difference.
These finding suggests that women are more than able to manage giant piles of money as well as or sometimes better than the men do. One reason is that men tend to trade more frequently, which increase investment expenses, while women are more patient buy-and-holders.
Fitzpatrick is known for her skill at cutting losses without sinking the ship, and keeping a cool head during crises. It’s a skill she might need at Soros. Her predecessor lasted only eight months. Here’s hoping Fitzpatrick sticks in the role as long as her finance-finagling mind wants to.