Innovation & Inclusion: Why Diversity Yields Better Results with Cathie Wood, Chief Executive Officer & Chief Investment Officer, ARK Invest. Jolyne Caruso-Fitzgerald, Divisional Vice Chairman, GWM, UHNW, UBS. Michaela Edwards, Partner & Member, Investment Committee, Capricorn Investment Group. Rupal Bhansali, Chief Investment Officer & Portfolio Manager, International & Global Equities, Ariel Investments.
Moderated by Lisa Diaz, President & Chief Executive Officer, Prince Street Capital.
SPEAKERS
Cathie Wood
Founder, Chief Executive Officer & Chief Investment Officer
ARK investment Management
Jolyne Caruso-FitzGerald
Divisional Vice Chairman, GWM, UHNW
UBS
Michaela Edwards
Partner
Capricorn Investment Group
Rupal Bhansali
Chief Investment Officer & Portfolio Manager, International & Global Equities
Ariel Investments
MODERATOR
Lisa Diaz
President & Chief Executive Officer
Prince Street Capital
TIMESTAMPS
EPISODE TRANSCRIPT
Lisa Diaz: (00:07)
Good afternoon, and welcome to our panel on Diversity and Inclusion and Innovation.
Lisa Diaz: (00:15)
We're going to outline, today, the reasons that it's interesting to invest in both innovation, as well as inclusion. I'm Lisa Diaz, President, CEO of Prince Street Capital Management. We are an emerging markets innovation fund, and I want to extend a special thanks to Anthony Scaramucci, and John Darsie, as well as Joe Alletto, for organizing and supporting this important panel today.
Lisa Diaz: (00:44)
So, innovation has become a consensus good. The market is thirsty for more innovation as a source of economic returns. Innovation, by its very nature, is about challenging the status quo. It's about finding new solutions to age-old problems, and addressing friction points. In the asset-management business, what's the biggest friction point? How do you generate alpha, and how do you deliver outsized returns?
Lisa Diaz: (01:16)
We believe that diversity, and perspective, insight, experience, and styles provided by women-led managers, and minority managers is an undervalued asset.
Lisa Diaz: (01:30)
A recent Goldman Sachs analysis of portfolio-management performance actually found out that diverse managers outperformed by 100 basis points. Think what that means over decade timeframe. However, in the US, only 3% of total assets are controlled by woman-led firms. That means that 97% of total assets are managed by the traditional power group, AKA, people who have a tendency to have a similar perspective.
Lisa Diaz: (02:06)
So we think that represents an arbitrage because, despite the small numbers, nearly 30% of top quartile managers are, in fact, women. So that's a great opportunity for allocators. We see inclusion as a next big innovation in asset-management business, and we hope that more capital should be allocated to woman-led managers, because it makes economic sense, because it delivers returns.
Lisa Diaz: (02:39)
I am very honored to be here with four trendsetters, innovators, change agents, who have been the forefront of transforming the face of finance.
Lisa Diaz: (02:51)
To my left, Cathie Wood, who is founder, CEO, and CIO of Ark Asset, who blazed a new path dedicated to innovation investing, and has disrupted the asset-management industry through her success in raising over 80 billion dollars in AUM. And now, some of the major mutual fund complexes such as JP Morgan and the American Funds are following Cathy's suit. Pretty impressive.
Lisa Diaz: (03:21)
Next to her left, we have Jolyne Caruso-FitzGerald, who is Divisional Vice Chairman of Global Wealth Management at UBS. She oversees UBS's top advisors who work exclusively with global ultra [inaudible 00:03:35] net families, and she was a founder of The Alberleen Group, a woman-owned and woman-led boutique investment bank. Before that, she was President and Co-Founder of the $8 billion Andor Capital hedge fund complex, as well as earlier in her career was both a Managing Director at Lehman and JP Morgan Securities.
Lisa Diaz: (03:58)
Next, we have Michaela Edwards, who is Partner and Portfolio Manager at Capricorn Investment Group, one of the largest mission-aligned firms in the world, with over eight billion dollars invested for families, foundations, and institutional clients. Prior to Capricorn, Michaela spent nine years as a Portfolio Manager at Norges Bank, the sovereign wealth fund of Norway, overseeing a $10 billion portfolio.
Lisa Diaz: (04:26)
And finally, we have Rupal Bhansali, who is Chief Investment Officer and Portfolio Manager at Ariel Investments, International Global Equity Strategy. She's a three-time intrapreneur, having founded multimillion dollar international equities capabilities throughout her 30 year career, not once, but three times. Once at Oppenheimer, at MacKay Shields, and now at Ariel Investments.
Lisa Diaz: (04:54)
So this is a rock star group of thought leaders in the industry.
Lisa Diaz: (04:59)
So, to camper off our conversation on innovation inclusion, Cathie, can we start with you? I would love for you to share your thoughts on innovation as Ark Investment has literally created a new asset class, and has harnessed the power of ETFs, and evolved the thinking with [inaudible 00:05:18], and coming up with a new set of KPIs.
Lisa Diaz: (05:20)
So tell us what you're thinking about these days and how you came up with the inspiration for this new asset class.
Cathie Wood: (05:27)
Okay. Well, thank you, Lisa.
Cathie Wood: (05:30)
I started in our business a very long time ago, 1977. I was in college at the time and, I worked at Capital Group and, as many of you know, Capital Group group is known for its in-depth research. And I remember being 1977 and I was put on a project to work with a team focused on Hong Kong, 1997.
Cathie Wood: (06:00)
And I said, I want to be in this business. I want to understand how the world is going to work. Fast forward, great two decades, eighties and nineties, tech and telecom bust, '08, '09, incredible risk aversion, I would say, permeating our industry, and this concept of benchmarks and indexes, directing investors as to how they should invest, and our strategy, which is all about innovation in a traditional asset-management firm was looking more and more like an odd duck and not receiving the support that I thought it should.
Cathie Wood: (06:44)
And I just said, "Okay, there is a huge arbitrage opportunity out there", just what you said in your intro, huge arbitrage opportunity. The private markets are pricing innovation here, sometimes five and 10 times higher than the public markets were willing to price innovation, and I thought, "Okay, starting my own firm would, would be a good way to go."
Cathie Wood: (07:10)
But even more, I think, when I thought, "Well, wait a minute, if you're going to start a firm, why don't you become a little more disruptive than that, and use some of the technologies that have disrupted all these other industries to, at the margin, at least disrupt our industry?"
Cathie Wood: (07:28)
So, social media giving away our research and really doing that to educate, that is one of our missions and values, but also to engage with the communities we're researching, those who are doing the innovating and become a part of those communities. And I have to tell you, I think it's given us an enormous competitive edge, because most compliance departments in traditional asset-management firms will not let their portfolio managers or their analysts say anything about their research or their portfolios on social media. We hired someone from the SEC to help us with that, and I think we're on the right side of regulation.
Cathie Wood: (08:16)
It's been enormous, the gratitude we get for the research we share, and for the investment ideas that we share freely, since we disclose our holdings at the end of every day, and we also disclose our trades.
Cathie Wood: (08:33)
So we have a lot of people with their PAs, their personal accounts, looking at what we do today, and other who don't want to do that themselves. They just say, "I'll let you do it, this is your area of expertise."
Cathie Wood: (08:46)
So it's been a wild ride from 15 million dollars in October 2014, to north Of 75 billion, as you said earlier, and very gratifying.
Lisa Diaz: (09:01)
Fantastic. So, Rupal, turning to you, how does integrate innovation into your portfolios at Ariel Investment? And, also, can you talk about, is innovation just the domain of young upstart companies, or do you find companies in your portfolio who are "traditional", who can innovate?
Rupal Bhansali: (09:22)
Well, thank you for that. It's always hard to follow Cathie Woods, on that topic of innovation, but I'll try.
Rupal Bhansali: (09:29)
No, I don't think innovation is a preserve of just upstart companies. I think Cathie makes a fair point that there was an arbitrage between private and public markets.
Rupal Bhansali: (09:39)
I personally believe that a lot of investors got very complacent and did research in a very traditional, backward-looking way. I'm a non-consensus thinker, and I'm a contrarian. So I believe can you actually identify innovation amongst incumbent companies and arbitrage that, by having a long term horizon.
Rupal Bhansali: (10:05)
I think that's the disconnect, sometimes, between the private markets and the public markets. It takes time to generate the payoff from an R&D investment and it takes patience, and that's sometimes lacking in people who invest based on benchmarks and based on tracking errors. I don't.
Rupal Bhansali: (10:24)
So, I think, with that kind of freedom, we've invested in a lot of companies. In a country where people rarely associate that country with innovation because it's known to be a country that's socialist, and of course we identify innovation with capitalism, and yet this country has over-indexed on innovation.
Rupal Bhansali: (10:49)
I'll give you a couple of seconds to think about which country I'm going to mention in the world. I hope it blows your mind. Whenever I talk to my clients, they are stunned by it. So here's the answer: it's France.
Rupal Bhansali: (11:04)
French companies, you look at Airbus, the aircraft that they came up with in terms of the Airbus 330, and the 350, and the whole line, it is giving a run for the money to Boeing.
Rupal Bhansali: (11:16)
Dassault Systemes, they do CAD/CAM software, and even IBM could not produce that kind of software. No American company has produced that kind of heavy duty, three-dimensional software that Dassault does. And I can go company after company. If you think Louis Vuitton is not innovative, you've got something coming in the luxury market, and Hermès, and L'Oreal.
Rupal Bhansali: (11:41)
You look at Proctor and Gamble, L'Oreal has stolen a [inaudible 00:11:45] on P&G in America in the category of shampoos. So, I think innovation can happen anywhere, anyhow, if you put your mind to it, in any sector. And, as an investor, if you think outside the box, which is I really think what Cathie is talking about, you can find opportunity everywhere.
Rupal Bhansali: (12:05)
So we own a lot of these sorts of companies. Safran comes to mind, it's in our portfolio, for example. It came up with a composite material to produce a next-gen aircraft engine. It had to spend billions of euros in R&D in the first 10 years or so, and it wasn't reporting profits from that endeavor, because the revenues not there, but the costs are, like what happens in a Tesla, or it happens in any of these new companies.
Rupal Bhansali: (12:34)
It just happened to be a publicly-listed company. But, now that they've got this product commercial, on the market, you have a 15 years line of sight to the spare parts, aftermarket opportunity, which is their business model.
Rupal Bhansali: (12:48)
So I think if you look for it, you can find it anywhere. And if I can tie it back, therefore, to diversity and inclusion, I think that's what it's all about. If you know how to look for it, you'll find it everywhere. And what you'll actually find is that diverse people tend to be the most innovative because they've got to be, they've been left behind. And so, for them, it's differentiate or die.
Rupal Bhansali: (13:11)
And so I think if allocators want to get a piece of innovation, they should back diversity. It comes full circle to inclusion.
Lisa Diaz: (13:21)
A very well spoken point.
Lisa Diaz: (13:23)
So, Michaela, pivoting to the second aspect of this conversation about innovation inclusion. Tell us about your vision to disrupt and transform the asset-management industry, and some of the catalysts that have driven your journey to this point.
Michaela Edwards: (13:41)
Well, thank you for the question.
Michaela Edwards: (13:44)
I would say the under-representation that we have in asset management of both female, but also black and brown investors, really hasn't budged much in the last two decades aids. And, for me, that is something that we need to address, especially on the pipeline side of it.
Michaela Edwards: (14:01)
So, at Capricorn, we've spent over a decade seeding and anchoring new, emerging, early-stage managers, and what we find is really two things: one being that there's a lot of innovation, there's entrepreneurial models that are happening with new managers, and, secondly, I would say is that there's a broader set of representation. So by just being earlier stage, we get a bigger opportunity set. It's less efficient, but also you get the opportunity to partner with the likes of Cathie Woods and the Rupals of the world, early on.
Michaela Edwards: (14:42)
And on that, we really want to partner with these new fund managers. We want to bring them to scale, so that we can crowd in other institutional investors, and, hopefully, we will, at some point, get an industry that is representative of the world that we live in.
Lisa Diaz: (14:57)
I sure hope so.
Lisa Diaz: (14:58)
So, Jolyne, given your role at UBS overseeing the firm's top advisors who serve large family offices, can you offer perspective from your client base as it relates to the issue of female founders, both as fund managers and business owners, do they have a different perspective?
Jolyne Caruso-Fitzgerald: (15:19)
So I am actually thrilled to be up here, and, Lisa, thank you for... I have a very different background than my colleagues on the stage, so I'd like to offer it from the family office perspective because we've done, at UBS, a lot of analysis around this and for the family offices in the room, thank you for leading, and this will resonate with you as I'm speaking, for sure.
Jolyne Caruso-Fitzgerald: (15:41)
So I think this actually might be a watershed moment where family offices, who have grown in stature, and wealth in buying power, influence in the investment community, this is the moment for you all to make the change. And there's four reasons why I think this could be a very pivotal moment for this challenging issue that I've been facing for three and a half decades in my career. One, it's the family office's global wealth increasing.
Jolyne Caruso-Fitzgerald: (16:13)
We saw family office assets soar. They're getting wealthier, they're getting more influential. The second trend is the institutionalization of the family office. You are all so smart. You are disintermediating Wall Street, you are doing deals, you are seating managers, you are clubbing direct investments into private companies. That whole trend gives you tremendous power to actually move the needle, and you are.
Jolyne Caruso-Fitzgerald: (16:42)
I think the third thing, which I will talk about a little bit more, hopefully, later in the conversation is we are in the midst of somewhere, depending on who you ask $30-60 trillion generational wealth transfer. Well, guess what? That is disproportionately going to women. We have all the statistics on that.
Jolyne Caruso-Fitzgerald: (17:01)
And the fourth issue, tied to that, is how do women invest? How do millennial women, how do next-gen women invest? They're investing with purpose. We have the stats on this, 65% of our family offices that we surveyed in our global family office report, have said that they are investing with ESG principles. And that that is going to constitute 25% of their asset allocation within the next five years. When I look at the confluence of these four factors, I say, "Bring it on."
Jolyne Caruso-Fitzgerald: (17:38)
The family offices are the ones that actually can change the equation here. Seed hedge funds that are started by women, seed direct women-owned businesses that are increasingly solving global issues. Put your buying power here, and I see it happening and I'm super excited about it.
Lisa Diaz: (18:02)
That's incredibly exciting and encouraging. So can we go back through history? Cathie, when you were starting Ark, there was this whole emerging manager programs that we've all heard lots about. I think it's been a focus of New York state in particular. What was your personal experience, and were they some of the big underwriters when you were just starting out on this vision to pursue innovation?
Cathie Wood: (18:28)
Not at all. Sorry.
Cathie Wood: (18:32)
No, what happened is the institutional world, which these consultants serve had gone, also had gone, the consultant world, had moved towards benchmarks, and we looked absolutely out of our minds. And so just too volatile, too radical. So, they were interested, because it was daring, they thought, but they could never come around, and I understand it. It's the world they grew up in. So I'm just happy I grew up more in the seventies, eighties, nineties, when I knew that, and this might sound a little cheeky, but when I was describing what I wanted to do, what I felt was missing in the investment world, when it came to innovation, certainly, someone not even in the business said to me, "Oh, so you mean the future of investing is investing in the future?" And I said, "Yes! Yes! Benchmarks are backwards looking."
Cathie Wood: (19:45)
And if, as we believe, there are four major innovation platforms that are going to transform, we think, every industry out there, and the convergence of those technologies is going to be very confusing, but is going to present explosive growth opportunities. We had to go out and go social to get our message out.
Cathie Wood: (20:12)
They understood much more than the consultants who were anchored to these benchmarks. And I think that anchor is going to become a dead weight if they don't watch out.
Lisa Diaz: (20:27)
So you didn't fit in the box?
Cathie Wood: (20:28)
I didn't fit in any box.
Lisa Diaz: (20:29)
You didn't fit in any box?
Cathie Wood: (20:30)
No.
Lisa Diaz: (20:31)
So you created your own box, or your own canvas?
Cathie Wood: (20:34)
Yes. And, just on that, I'm going to credit MSCI.
Cathie Wood: (20:38)
In 2018, MSCI actually came to us and said, "It seems as though what you're doing here is creating a new asset category."
Cathie Wood: (20:52)
I won't say asset class, but much like the emerging markets they moved from, they helped in invent, I suppose, the investability of emerging markets by combining countries in one portfolio. That seemed radical and transformational at the time. Well, we're doing the same with innovation, and the correlations among these 14 technologies involved in these five platforms is not that high, surprisingly.
Lisa Diaz: (21:25)
Which is exciting.
Lisa Diaz: (21:26)
So, Rupal, you've also been hugely successful. So, globally, the number is even more disturbing. Only 1.3% of total global assets are run by diverse managers. You are one of them.
Lisa Diaz: (21:42)
So tell us, what was your own path and experience with being in the DEI space? Did you get encouragement? Were there certain pockets that were supportive? Tell us the story.
Rupal Bhansali: (21:57)
Well, I think I get asked this question a lot. What does it feel like to be one of the rare female portfolio managers? And the only answer I can give is, not successful, or great, or gratified. It feels lonely.
Rupal Bhansali: (22:16)
There should be more of us, and I think that's what needs to change. And I've said this five years ago, and 10 years ago, and 20 years ago, and the clock is ticking, and I think the numbers don't move, and I think that's the travesty.
Rupal Bhansali: (22:35)
But I do believe that the future is going to look very different from the past, and there is going to be a disruption of a different sort in our industry, which is to say, it's been easy to invest passively, and not think about it, because markets have gone up. A bull market, you can suspend your thinking and just go long and think that you are skilled, even if you're just lucky, but I don't think the next decade or the decade thereafter, it's going to be that easy to make money passively. Valuations in the markets are sky high and you really got to curate your portfolio.
Rupal Bhansali: (23:20)
You got to pick your spots, and those are the kinds of things that I think people on this side of the table tend to do. We pick our spots, we don't just lean on a benchmark and accept whatever it brings to us. We differentiate from it, we actually stand out.
Rupal Bhansali: (23:39)
And I think when it comes to, therefore, picking managers, not just picking asset-losses, people will have to think outside the box there too, because the incumbents have really just hugged the benchmark and it's been fine, and so have the allocators, and that's fine, because the benchmarks just kept going up. But when they don't, and they actually start coming down and you have what I call, for the first time, potentially, a protracted bear market, which we frankly never had for 70 years. We've had quick ones, we've had short-lived ones, but we've never had a protracted one.
Rupal Bhansali: (24:21)
Now I cover global equities, and I can tell you, I covered Japan, tortuous. Try going passive, investing in a market that's falling. You'll have your head handed to you. And I think that the US markets, and every Western market, like we went through in many other markets in the world that have done nothing but fall, if they simply stop thinking, all you experience is losses.
Rupal Bhansali: (24:51)
So in investing, ignorance is not bliss, it's loss. So I think they will wake up to reality that they need to do things differently. And part of that means looking for new blood, and new blood happens to be diverse. It's not pale, male, and stale. It's usually female, and I think that's what's going to turn the numbers, partly, because they will have no choice.
Rupal Bhansali: (25:21)
That said, I think if they are smart about it, they will try to get ahead of that curve, because one of the things about active management is that it's capacity gated. Try getting into Cathie's funds, now, at 70 billion compared to when she was at 10 or 15 million, as she started out. It's harder and harder to put that money to work. So you need to get in early, and part of that means trying to identify that talent early on.
Rupal Bhansali: (25:50)
That is the market inefficiency that allocators can exploit, and should exploit, if they're smart about it. But as they say, if you want to move the mouse, you got to move the cheese, otherwise a mouse ain't moving. So I think allocators, if they are serious about ESG, DEI, all these buzzwords being thrown about, they need to set targets, and they need to have consequences for meeting them or missing them. There haven't been any and nobody got fired for hiring IBM.
Rupal Bhansali: (26:32)
That's what's playing out in our industry, and look what happened in technology. I think a lot of people eventually did get fired for hiring IBM, and they would be well enough to learn from that industry into ours. Our industry is facing massive disruption, massive change, and people are in denial about it.
Rupal Bhansali: (26:52)
So I would just suggest: create targets, measure them, hold people accountable for both meeting them and missing them, and that's how you move the mouse to the cheese.
Lisa Diaz: (27:04)
Sounds like a great idea.
Lisa Diaz: (27:05)
So, Michaela, can you talk to us? What are some of the hurdles that less-established managers face when being considered by larger institutions? And can you think about how you changed the criteria used to enable, to facilitate investment, in this next generation of thought leaders and investors?
Michaela Edwards: (27:26)
Absolutely.
Michaela Edwards: (27:27)
I think Rupal is spot on. There needs to be innovation in our industry, and that means the traditional way of allocating clearly hasn't worked for representation. And we all know the three major hurdles, they tend to be track, record, scale or size, and pedigree. If you don't have a minimum of a three year, or, hopefully, a five year track record, or a minimum of a hundred million under assets, assets under management, and hopefully a name brand or two on your resume, either a school or a firm, you don't check the box.
Michaela Edwards: (28:02)
So you get screened out. Now, when people look at a track record, I feel that they use that as a proxy for scale, we're saying, "Okay, I see the track record, there must be some skill here and not just luck."
Michaela Edwards: (28:16)
Well, I think that's an easy way out. I think performance is an outcome of people and process, and that's on the allocator side, that we really need to do the job of identifying differentiated talent, differentiated process, so hopefully, we can estimate that there's a probability of outperformance. And not only probability of outperformance, but a repeatability of that outperformance. That's the allocator job, and not being willing to do that, I think you leave a lot of alpha on the table by not being early.
Michaela Edwards: (28:51)
And when it comes to scale, what we found to be a good solution for a lot of our big-ticket clients, is to take a portfolio approach. A lot of our big allocators can't allocate to a hundred million dollar fund, but they want to get in. They want to be in the new startups, but they can't make the single ticket themselves. So if you can create a fund structure or a separate managed account, you can get around that.
Michaela Edwards: (29:18)
So if you find a compelling strategy, a team that you believe in, there's ways around it, if you're willing to. And then last, on pedigree, I would say, of course, it's easy to tick the box and you find comfort in name brands, but at the same time as Rupal was pointing out, I think there's a lot to be said for cognitive diversity, and especially for innovation.
Michaela Edwards: (29:44)
You need creative solutions. And around that, I would say just working for a company that's B corporation. We have half of our firm from other countries, globally. We have 50% women. I see it every day, the benefit of diversity of thought and of experiences, and that it leads to creative solutions and bold decision making.
Michaela Edwards: (30:06)
I want that tension in the room of different views, I think that leads us to better decisions. So, I think, instead of just talking about the risk factors of going early, and not having a track record, et cetera, I would love for us to switch it and say, "Well, what's the opportunity cost of losing out on the five first years of compounding returns?"
Michaela Edwards: (30:27)
That's the cost, and it's not just risk.
Lisa Diaz: (30:30)
So, Jolyne, let's talk to you.
Lisa Diaz: (30:32)
The family office universe seems to be, that could be at the forefront of this evolution and change. They have more flexibility. Often they are, themselves, innovators, they thought differently.
Lisa Diaz: (30:44)
So, can you share some of your numbers about how Millennials generation acts are likely to allocate and how they're going to think about their allocation in this great wealth transfer?
Lisa Diaz: (30:56)
Are they going to be more open to more innovative ways and innovative types of managers?
Jolyne Caruso-Fitzgerald: (31:03)
Yeah, we think so.
Jolyne Caruso-Fitzgerald: (31:05)
We've done a lot of measurement at UBS around family offices. We have an annual survey, and we spend all our time in the ultra, at least I spend all my time in the ultra space, and the global family office space. And I think there are a couple of trends that will help this dilemma and move the needle here.
Jolyne Caruso-Fitzgerald: (31:26)
One, as I mentioned before, this 30-60 trillion that is coming over the next 20 years will go to women. We need to see more women step up in their family offices. The endowment and foundation market has a lot of female CIOs. We don't have as many in the family office. I hope that that will be a seed change, but to speak, specifically, to Millennials, we see a lot of families coming to us, to generation one, saying, "Oh my gosh, my grandchildren, they want to change how we do everything, from philanthropy, the causes we give to." As everyone knows, Millennials are more left leaning, so their politics are very, very different. How will that change?
Jolyne Caruso-Fitzgerald: (32:14)
One: they care about climate. They care, in a post-COVID world, about how women in particular have been affected globally by COVID, disproportionately. They care about social inequity and gender parity. So as we see this cohort, Millennials, by the way, they're 70 million strong, they're actually bigger than the Boomer generation right now, in number.
Jolyne Caruso-Fitzgerald: (32:43)
As we see them grow in their family offices, as they get wealth passed to them, I actually think we're going to see a change in how the money is allocated, who the leaders of the next generation asset managers are.
Lisa Diaz: (33:00)
So finally, we're running out of time, but as four powerful change agents and leaders, if you can each make one specific recommendation or aspiration, what would it be?
Lisa Diaz: (33:13)
So, Cathie, can we start with you?
Cathie Wood: (33:16)
Sure. In terms of, are you talking about for women?
Lisa Diaz: (33:19)
Women to increase the number, so how do we get from 3% to 10%, right Rupal, or maybe 25? We have a couple of ideas?
Rupal Bhansali: (33:29)
10% by 2025, 30% by 2030, and 50% by 2050. We'll give you guys time.
Cathie Wood: (33:41)
Well, I'm on record as saying I've loved being a woman in this business, I have.
Cathie Wood: (33:47)
Because when I started, it was '77, I was in college, quite young, very low expectations, but I had high ambitions and it's easy to surprise if you're willing to put yourself out there, make yourself vulnerable.
Cathie Wood: (34:05)
So the first is, participate, but only if you have really good ideas that actually are questioning the conventional wisdom. And then, in terms of the career itself, make sure you move into a position where you can be measured, for better or worse. So last year was better for us this year, worse. You take your performance with you. No one's going to take that away from me and Ark.
Cathie Wood: (34:33)
And, by the way, I'm not worried about this year's performance, just saying. We have a five year time horizon.
Cathie Wood: (34:38)
And then the third thing is if you want to start your own business, look for a huge unmet need out there. What is missing? And I think there is a lot missing in the financial world right now that innovators come can come in and change.
Lisa Diaz: (34:56)
Sounds good. What about you, Jolyne?
Jolyne Caruso-Fitzgerald: (34:58)
Women have to invest in other women. As we get wealthier, we have to put our money into other women, other successful women.
Lisa Diaz: (35:08)
So money's power?
Jolyne Caruso-Fitzgerald: (35:10)
We haven't always done that, by the way.
Lisa Diaz: (35:13)
Michaela, what about you?
Michaela Edwards: (35:14)
I say set a target and works towards it. Whatever that allocation is, if it's realistic and measurable, you can get there
Lisa Diaz: (35:23)
Rupal, you have some bold numbers. I like numbers.
Rupal Bhansali: (35:28)
Well, we'll come up with a pledge, because I think people need to sign up for these things, and we need to measure them against it. So, stay tuned.
Rupal Bhansali: (35:37)
But I think in terms of suggestions, again, innovation to the rescue. Board members and board seats, women are very underrepresented on corporate boards, even in this country, but worldwide. And one head hunter decided that she would only present female candidates whenever any board search took place to the Nom/Gov committees. And, initially, all she would tell the Nom/Gov chairman and the members of the board is that, "look, let the women go first, if you don't like any of them, I'll present you with a male candidate, but first go check out these women." And there's not been a single instance when she done they've ever had to go back and identify a male candidate.
Rupal Bhansali: (36:21)
So I think there are lessons and parallels here for us too in asset management. Insist on finding diverse managers, tell your consultants, tell your clients, tell whoever it is that you are, "Only find me women, and I won't give you business if you don't find me women."
Rupal Bhansali: (36:38)
That's what happened to the head, that's the mandate she put forward. And suddenly they're able to find all these women. And that's what happened in another shop where the boss was looking to increase diversity in his team. And initially, his own team said, "well, we can't find anybody, we can't, it's not possible. There aren't any." And he said, "Okay, we won't fill the position." Well, the moment he said, "We are not going to fill the position. They were like, "Oh my God, we've got to do all this work." They found a diverse candidate.
Rupal Bhansali: (37:10)
And so I think, sometimes, you just got to draw the line draw, and it's about time.
Lisa Diaz: (37:16)
So it sounds like we need a step change in the asset management industry.
Lisa Diaz: (37:21)
This illustrious group of women are going to create a manifesto, and try to brainstorm on actionable next-step items with metrics and a call to action for you to take advantage of this fantastic opportunity of diverse thinking, innovative thinking, in the next generation.
Lisa Diaz: (37:42)
So thanks everyone, today. This was exciting and we'll be back.