Christopher Ailman, the chief investment officer of California State Teachers Retirement System, is on a mission to “break groupthink” among the $318 billion system’s fund managers. “We constantly try to look for diverse teams,” he said, speaking onstage at 100 Women In Finance’s conference last week. “Diversity is the best way to spread risk. And diversity of thought is another form of diversification. It’s absolutely critical to have people in the room who think differently, come from a different background, different age and ask a different question.” 

Promoting women’s representation “resonates with us, and with me personally” because 70 percent of CalSTRS’ members are women, says Ailman. 

But loading up a firm with female recruits is not enough. Ailman often meets firms that claim to be diverse, but “almost all the women are in the marketing team or are analysts. No women PMs, no women directors. That’s not diverse.” Ailman and his team have started to ask questions of prospective fund managers such as “Who’s on the investment committee? Who’s making decisions? What’s in the room, who has a say?” 

This lack of seniority for women in asset management is borne out by the data. In private equity firms, for example, women occupy fewer than 20 percent of investing and operating roles at vice president and managing director levels, and just 17 percent of C-Suite positions, McKinsey’s 2022 diversity in private markets report found. 

Retention issues 

Women are leaving the fund management business after having children, said Ailman, and investment firms are not doing enough to retain them. There is evidence for this in the private equity industry, which still struggles to retain women. McKinsey’s 2022 report found that the attrition rate for women in investing roles in the Americas is higher than for men across entry level, associate, vice-president, principal and managing director roles. The report also found men are promoted more frequently at all these levels than women. Firms should facilitate part-time and remote work to retain women, said Ailman. 

NPM caught up with Ailman after his panel and asked: is part of the problem that women run out of advancement opportunities because the most senior and lucrative levels at PE firms are saturated with men who remain in position for years or decades? Should senior employees and partners – mostly men – step aside to make room for next generation? “Yes, that’s a problem. It just has to erode over time, and [firms] need to be progressive and fix it… Change has just been too darn slow.”  

Beyond gender 

“Diversity is more than skin deep. It’s not just gender,” Ailman told NPM after his panel. Another important form of diversity is educational background. “You don’t want all your quant people to have gone to one school, the same math class, the same professor, the same language. When you speak different languages, your brain works a little bit differently than other people’s. It doesn’t guarantee that you’re going to make better decisions, but it improves the odds. 

“I used to only hire people that came out of business majors. Now I realise that hiring history majors, language majors, English majors – I can train them up [in the minutiae of asset allocations and investments], but they look at stuff differently. They think about things differently.” 


Ailman called on women in asset management to provide “allyship: supporting each other, networking. If you climb the ladder, the first thing you have to do is turn around and put your hand back down and pull somebody else up. You’ve got to network together. We see that in other ethnic groups that network together and dominate entire industries. We see that in in other parts of the world where a country will band together and support one another. You see that in the universities: Harvard will connect with Harvard alumnae. Don’t compete with one another, support each other. Help each other.”