Women in Alternative Assets - Episode 1

Hello, and welcome to the IQ EQ podcast, where we have conversations with industry experts to discuss trending topics within the global alternative fund sector. We help you to understand the landscape of the industry. Deep dive into case studies with our guests and bring fresh insight on things to look out for in the future. And if you'd prefer to watch this episode, you can do so on our website iqeq.com/podcasts. In this first episode of our new Women in Alternative Assets series, Rachel Aldridge, IQ-EQ's, managing director of our regulatory and compliance solutions talks to Shefali Roy about female representation in the industry and what can be done to increase it.

More women are working in the alternative space than ever before. Preqin recently reported that the proportion of global alternative assets employees that are female has grown. Great, I thought, but then I looked at the numbers. Up to 19.7% from 18.8% in 2017 - less than 1%. The raw number at less than one in five is too small. And the rate of change is too slow. Preqin also found that the leading sector is venture capital with 21% of employees being female and North America leads the regions for female representation at just over 20%. But still, nothing to write home about. In a world where working norms have changed beyond what we ever thought was possible back in the pre-pandemic days of 2019, why is progress so slow? The situation is worse at the more senior levels. At managing director and above, women account for just 12% of roles in alternatives. As a member of the global investor services industry IQ-EQ wishes to contribute to the cause of supporting women in alternatives. We've recently introduced Launchpad, a unique initiative, which supports women launching their first fund. We also aim to provide transparency to the industry and help stimulate the conversation on this important topic. Someone who is no stranger to the debate around women in alternative assets is Shefali Roy. Shefali is an angel investor who invests globally in startups that build technology products in FinTech, real estate, fem tech, and the future of work, amongst others. In 2017, she delivered her first TEDx talk on ethics and business. Shefali is the former chief operating officer and chief compliance officer of TrueLayer and also the former European CCO and MLRO for Stripe. Prior to Stripe, she led compliance business conduct and risk across Europe, the Middle East, India, and Africa for Apple. And she was the Global Chief Compliance and Ethics Officer for Christie's. And she was part of the team responsible for private wealth compliance for Goldman Sachs across Europe and the Middle East. Shefali, welcome, and thank you for joining us today. Let's start with an easy one. What is femtech and why is this important?

So that's a really good question. Thank you for that introduction. So, for us, femtech is women's health and anything to do with technology for women's health. So that could be services and products. It could be things like diagnostic tools. It could be education. It could be content. It could be things like telehealth. One of the things we love, and one of the things we are seeing in this new venture fund, which we can talk about later, Rachel, and what we're doing, is just the plethora of things that women are building for women and, and everybody at the partnership of the fund are women. And so we're at that age where we need to know what's happening with our bodies and we need to know what's happening with our health. And so, as innovation in women's health becomes more apparent and transparent and current, we just felt there was an appropriate time to think about investing in the sector. So, for us, femtech is women's health, and technology in that.

Great. Thank you for clearing that one up. Okay. So, coming back to the research, there's lots of research claiming that founder teams with women outperform men-only teams. Do you believe that? And why would it be the case?

Yes, yes. I do believe that. Because I think with us, we women, we are just, you know, we are resilient and I think we are more frugal and we are more worried and conscientious, I think about how we think about money. And I think that stems from home economics. It's not just business economics, I think. As you think about women and I don't know about your women friends, but all my women friends, we do think about our budgets. And we've been thinking about our budgets since we've started working in our twenties. We think about what we're spending. We think about travel when we all travel together about economising - and having a great time - but making sure that we live within our means. And so, if we extrapolate that thinking to business and the world of commerce, I think we have those same sort of home economic ethos in how we run businesses and we do it very well. And so how we look at teams, how we cultivate culture within an organisation, why we think about spending money and particularly, do you know, in venture or when running businesses, if you're not a public company or maybe particularly also, if you are a public company, there's always that conscientious thing of – ‘It's other people's money’. So, let's make sure we take it well, but we also spend it wisely. And we are very conscientious and frugal about how we are optimising for that $1. I remember when I was at TrueLayer and I was COO, and you know, we didn't have very much money when we started. I remember saying to the early employees and all my colleagues, we need to figure out how to make this $1 go 10 ways, because that's all we can do, cuz we literally had no cash. And so I think women inherently think like that. And so when we build businesses on the economic and the business side of things, I think we have that innate sense of how do we think about money and how do we think about if it was our money? How would we do it? And that was a lovely thing at Apple actually. And that's why I think, you know, Apple, when you think about the success of this business, Apple is actually a finance company that builds product. I mean, everything at Apple was run through the finance team and they were brilliant to the last penny about what was spent and how it was spent. And I remember when we used to do training and induction, if you were a new employee at Apple, one of the things our people team used to say to us is you need to think about Apple's money as if it was your money. So, you don't spend frivolously. You don't spend just because we are, you know, at the time, and still is today, one of the most successful businesses on the planet. Just because we have so much money in the kitty doesn't mean you spend it. And I think a lot of success of Apple and, and the way the market looks at it is because of the way they look at finance and that sort of mentality, I think women are built with it innately as we're young people and as we go into our professional lives. So when you think about business, it's the money management of it. And then the other flip of it we’ll see is the nurturing and how do you want to build good teams and how do you want to build resilience and making sure everybody's happy and making sure everybody's productive. And we innately have that sense of thinking and that sense of development. So when you build business ventures with women and leaders who are women, I think all of that comes into the fore and it comes in really well. We see it when we look at the angel side and I look at it when I look at angel investing, people go, oh, you know, women business venture is really risky. And I was like, yeah, but if you invest in women, they actually derisk it for you. Because they've thought about all of these things before they've come to me and said Shefali can you give me five bucks? So my investment is being de-risked as I'm speaking to that founder, because a woman founder and a woman CEO, and a woman leader is already thinking about that. And you extrapolate that and you think about it with diverse founders, people who are people of color, sexuality, socioeconomic background, and it's because we didn't have that much. So, when we do get the opportunity to get some, we want to make sure we get a good play and we do put, you know, our best foot forward. So, women businesses for me, it's just stupid that people don't invest in women more.

Thank you. That was a fantastic answer. A number of reports have highlighted things like closed networks, unconscious bias, lack of gender diversity commitments in preventing women from fully capturing the opportunities. What's your opinion on the key barriers that women face in attracting investment capital and are they inherently different to the barriers facing men?

I think the qualification Rachel for the men is - what type of men. And, I think when you look at venture and your stats at the top of this podcast, white blokes are getting a lot of access and they're getting a lot of money and that's fine. I mean, you know, it is what it is and that's the market, but there is much to be said about unconscious bias. There is much to be said about access because we don't look like everybody else. I think when I was running and, and raising money for TrueLayer, I met one woman investor who could write a check. And at the top of this, you had said 21% of women, you know, are in venture, and, that's an interesting stat, but of the 21%, I'd wager that none of them can write a check. And so the decision making ability is actually not in the IC for a woman representation in that. So I think there's much to say about the unconscious bias and the access. Most people in venture in Europe, are white and male. And so if your networks, person and professional, I wager would be the same, and so you are not seeing people like you and me and potentially your social circle is not people who look like me either. And therefore, if you're not having that in your life as part of just business as usual, you're not going to actually think, oh wait, hold on, let me go look at an Indian woman and see what business she's pitching. There's just not going to be that thought. And it's not malicious and it's not devious and it's not a deliberate, it's just, it's an effort. And no one's going to make the effort because look, I've got this pool of people who are building some cool things right in front of me. I don't have to make the effort to go find. The other thing to see on the founder's side is it it's tremendously daunting. You know, when you are pitching for money, you're pitching this beautiful dream of your business, it's a daunting thing, regardless of your gender and your, your ethnicity to pitch the business to someone say, ‘Hey, listen, can you give me 10 bucks? Cause I have this dream and I'm going to build this product.’ So you can't imagine how much tougher it is for a non-white person or for a woman to go into a room full of white male venture capitalists and go ‘Give me 10 bucks.’ It's a really tough gig. And that in itself is really hard and there's bias in there. And, so for me, and a lot of the reason why we do angel investing and I do it is because I kind of think there's so much innovation I'm missing. There's so much innovation, I, as a consumer am missing because certain types of people are not getting funded and certain types of people don't have access to a room to pitch for money. And that has to change because otherwise we are going to miss out on tremendous amounts of products and services that are going to save the planet, or going to save women, or going to help consumers. You know, you were asking me at the beginning, what's femtech? I mean, can you imagine two women going to pitch into a VC who's white around the table and all blokes about, I don't know, a menstrual app. I mean, that's never going to happen. That's never going to happen! And, and so we need to figure out, or pitch an app about menopause. That's just not going to happen. And so I think there's just all these inherent biases that we have, and we need to sort of deconstruct that and then think about how do we level the playing field. So, the 21% of women who are in venture need to get to a stage in their careers where they can actually write a check, it's not enough that they are associates and principles or analysts or whatever fandango title, you give them. They have to be in a room to say, actually, this is a great business. It has good fundamentals. It has great potential. Here's the money that you want. And we're not nowhere near at that stage in Europe. And so all, I think all of these factors inhibit that.

Yeah. And clearly it's really important to get women in there. Have you seen the sort of outlook of men change? Are they more willing to open the door and say, come and talk to us? Or, have you not seen any change really?

I think there's some, and I think with everything in life, it's all about who you know, and so a lot of things get done because of an introduction or a network or Shefali do this, or someone comes to me and I introduce them to someone else or they introduce to me. So there's a lot to say about ventures still in Europe, and certainly in London at least, where it is very much on networking and it is very much on introductions and making sure everybody knows everybody else. I don't think, and that's all inbound, I don't think there's a sterling effort being made to outbound and outsource those outbound deals, which is going and finding those businesses in those geographies and in those verticals. You could be, you know, a woman founder, who's building an AI tool, I don't hear of you very often. So, I think you have those inhibitors anyway, and then Rachel should overcome those and kind of go, okay, actually, you know what, I have to go find someone in that vertical who potentially has to not look like the white blokes that I funded yesterday. That's hard. And I don't think we should be doing diversity for diversity sake because a good business is a good business. And it's not to say that every business that a woman or a diverse founder starts is a good one. There are quite a few out there which are dunce, but all in all, I think there's hurdles to be made, which is how does one actually go and access those networks and go and access all of those deals that ordinarily wouldn't come to you. And I think I go back to the point of - If your social set is also every person who looks like you and it's so homogenous, I don't know who you're going to get those deals. So there's, I think a ripple. And one of the things I keep saying when I talk about venture in Europe is I think venture in Europe is 20 years ago banking. So 20 years ago when I started in the city, I can honestly, I think when I was at Goldman’s, I was maybe one of four women on the floor. Maybe the only Asian brown woman on the floor. There were quite a few Asian/Indian blokes on the floor, but not many women who look like me and not many women, period, right, four or five. But now if you look at banking, it's a plethora of people and backgrounds and ethnicities and sexuality. And we are very open about it and transparent about it. And we kind of love it and embrace it. I don't think venture is there yet. I think we're a good 10-15 years away from that.

Yeah, and in your experience, have you seen any geographical differences? I mean, you've worked in many places in the world. Which would you say were the leading regions?

Yeah, look, I think everybody's trying to make the effort, but I think, you know, I talk to venture capitalists and angel investors in Latin America to Asia, and we're seeing the same thing. Asia, I think is a, excuse me, is a lot better, I think there's tons of different types of VCs and types of investors in the market. Many, many women, many, many ethnicities, and also very interesting products and services being, being shaped out of the region. I think Latin America too, Africa a lot less, I would say, I don't think yet they're that many, although I'm in touch with quite a few African VCs where they're led by women GPs, which is kind of lovely. So, I think we're getting there, but I think weirdly, I think the west is well behind. Like, you know, I was in Australia recently. Australia is bonkers, there's no diversity at all. And it is one of, you know, Sydney and Melbourne are two of the most multicultural cities on the planet. There is no diversity in VC at all. There are quite a few women, but there's nobody who looks like me who can write a check, And you kind of go, I can't believe we are living in one of the most diverse countries on the planet, certainly in Sydney and Melbourne, two of the most diverse cities and multicultural cities. And I don't see anybody who looks like me or who's Asian in that world. So I think the west weirdly, and I say the west very sort of pejoratively but I think we are well behind, well behind.

So, you've talked about not seeing any people that look like you. Have you had any role models, or mentors that have helped you and, and how important were they?

I've had a few. I've had a really really few good ones. One was a couple of bosses, two bosses that I had in Australia who were great. One was my first boss and she was just fantastic. I've had a lot of women bosses actually, who were really wonderful. Some who were equally a bit weird and odd, but quite a few who were fantastic and they pretty much helped me be, you know, the manager/ leader kind of person that I am. And I, you know, I always say to them, even till today, like 20 years later that they really spoiled me because I thought that's what managers were like. And they were wonderful. And I was like, all managers are like this. They're like, no. And now 25, so however many, years later when I have my career, I say oops, not many managers are as great and gracious and, patient and communicative, you know, as they were. So I've had those. And I still am in touch with my first boss. So I started my first job when I was at HSBC in Australasia before I moved to Goldmans in Europe. And she knows me since I was 19. I'm not 19 anymore but she was my first boss. And, you know, in Australia, even if I go home for a week, she's the only person I make sure I have a coffee or dinner with because she's not only just a terrific woman and a terrific leader and a great boss, but now she's a really good friend. And so I still go to her for advice and I still go to her for mentorship and advice about anything, life stuff, work stuff. It was really good. And then I had a really terrific boss when I was at Apple, a guy called Tom who was just delightful and wonderful and incredibly trusting. And, so I learned a lot about learning and managing with trust from him, where he was pretty much, ‘Actually, I think, you know what you're doing, call me if you need my help. Bye!’ and that type of stuff, where you're placed in some really, really, terrific situations of importance and influence. And you have a manager who goes, ‘I trust you, get on with it and call me when you need something’ that was kind of wonderful. So, I've had a few of those, and those are still people and folks that I go back to and say, ‘We're thinking about doing this. So, I'm thinking about doing this, what do you think.’ Particularly when I left Stripe, for example, I mean, I've left Apple to join Stripe. Apple is a delight. It’s a beautiful, magical company. And Tom, working for a guy like Tom, you kind of go, ‘Why would I leave this it's beautiful!’ But I said to him, ‘What do you think I should do?’ And he was like, ‘I think you should do it because you'll never get this opportunity again. And it's a wonderful place to be. You've had a great career, take a chance, take a punt. And you know, we'll be here if you need anything,’ and that type of stuff. You don't get that very often. So I have those sorts of mentors and leaders who I've worked with professionally. And then I have a few who are personal people. Who've been in my life, who I trust a lot and who, you know, will not allow me to get away with stupid crap and who won't let me get away with rubbish. And they call me out on stuff, which I kind of love and they're friends and acquaintances, but they are people who, you know, hold me in line, which I kind of love.

Good. So, I mean, that brings me really to my last question, which is: For anybody that cares about this stuff, as you and I do, what should they do differently today and tomorrow?

I think, I wouldn't say, I mean, I don't know about, differently, but I would say just start. Because it's very daunting. You know, as you, as one thinks about a new career, a new life, starting a new thing, it's very daunting. And so I, for me, it's kind of like just start. And the difference, I guess, would be - Don't think you can’t do it, think you can do it! One of the things Rachel when I realised after I left TrueLayer and thinking about this venture journey, I thought, my goodness, it's a big thing, I wonder, you know, I wonder how I'm going to do. But you know, every single person that I reached out to and I buzzed and I said, I need some help or not help, I need some advice. Can you give me 20 minutes? And can you like, tell me what you think I'm doing wrong or what mistake I might make or whatever. Not a single person turned me down. And it's kind of lovely to think. There's so many people out there not who's invested in your success, but who's invested in your calm and invested in your ability to achieve certain things. And it was also kind of going, ‘You're going to try stuff, I'm behind you. Let me know how I can help!’ those sorts of things. You don't really know you have it until you actually call on it. So for me, it's, it's not the difference rather than start, see how you go. And you'd be surprised that there's a legion of people behind you who want you to do well. And you can call on them to, you know, get a, have a bit of a chinwag and ask for advice. And so: ‘Do it, start it, take the chance, take the punt!’

Sure. And I, you know, I think I would add to that - by calling out to corporates at a, you know, in a similar situation to IQ-EQ, perhaps working on the service provider side of things to, you know, put an initiative in place like we've done to actually provide support and provide some help. And yes, there is some financial help there, but a lot of it is non-financial. It's about giving support, it's about bringing together a community, and I think that's really important. And, you know, that idea was something that was generated here in IQ-EQ by somebody, you know, that never probably thought it would come to anything, but they brought it to the table, we've gone with it, and we've now got nine clients who are on the platform and hopefully kind of a bunch more. So, I think whatever position you are in the industry, actually, you can make a difference, even if you sort of think you can't initially, being creative and just moving that dial a little bit. Well, I think, you know, obviously there is a massive opportunity out there for us, you know, until we get to kind of parity in terms of employee stakes, there is a very long way to go, but I think we can definitely all make a difference. So, thank you Shefali, for sharing your time and words with us today, we really look forward to hearing about your next successes, which I'm sure are just around the corner. So thank you very much and goodbye.

Thanks for listening to stay up to date with the latest news and insights in this fast moving industry. Be sure to subscribe to this podcast and to listen back to previous episodes, we'll find out more about the solutions IQ-EQ can offer. Please visit iqeq.com. Goodbye.