Note to the reader: This article was published in April 2022. The interview below has been edited and condensed.
In honor and in celebration of our International Women’s campaign, we caught up with two senior leaders from one of Europe’s largest asset managers — Legal & General Investment Management (LGIM).
In an industry that employs a very low proportion of women, LGIM stands out having one of the highest percentages of women leaders (50/50) in the asset management industry. This is unique for the industry, which has seen glacial movement over the last 20 years, even before the onset of the pandemic. Indeed, a recent study found that only 20% of executive teams and board members were women at the world’s top 50 asset managers (see Notes 1, Hendrick & Struggles). This is on top of the low number of women fund managers at the end of 2019, 14% according to Morningstar research, a percentage that has not changed for the last 19 years (see Notes 2).
Recently, Oliver Wyman Partner Julia Hobart sat down for a conversation with Sonja Laud, Chief Investment Officer (LGIM) and Sarah Aitken, Head of Distribution (LGIM). Together, we looked back at why women are under-represented in the asset management industry, and the actions leaders can take to #BreakTheBias in financial services, and drive systemic change.
Three key takeaways
1. Authenticity matters.
Setting values and behaviors begins with leadership. But it cannot only be at the top, and means bringing the whole organization together to champion diversity and inclusion. Leaders across the organization need to authentically want to change things for the better. Firms must ‘walk the walk,’ and put their words into actions. It’s not about hiring or selecting women candidates for the sake of women.
2. ESG is accelerating gender balance.
ESG, sustainability and responsible investing now combines analytics with purpose and making a difference, and this is helping to attract women to the industry.
3. The cognitive diversity lever.
Building diversity and inclusion into a firm’s culture has many benefits, including evidence by Citywire that mixed investment teams have performed better (see Notes 3). Particularly in light of the enormous current geopolitical, macroeconomic and market challenges, it is especially important to be able to call on cognitive diversity — and the inclusion of teams that have different styles of problem-solving and offer unique perspectives.
What follows is a synthesis of our conversation. We explore where we have come from, where we are now, and looking forward at how leaders in the asset management industry can be a conduit for change.
Where have we come from
Women and the Asset Management industry, the last 20 years
Julia Hobart, Partner, Oliver Wyman: To get started, do you think we have progressed in the last 20 years?
Sonja Laud, Chief Investment Officer, LGIM: For investment teams, there has been more glacial movement. There have been several factors at play: One is on content, where university courses reinforce the perception that asset management is purely analytical and about spreadsheets. This may not appeal to anyone, women included, and completely misses the color and interpretations integral to good portfolio management. In order to attract women to asset management, we need to pique more interest naturally through the education system and convey the much broader topics and skills involved. For example, at university you see modules on Capital Asset Pricing Models and Efficient Frontiers, but there’s less curriculum on investment modules. This, to me, is one of the big bottlenecks, and my hope is that we will start to see a change for the better.
I think responsible investing, sustainability and ESG will help drive more interest for women considering careers in the asset management industry.Sonja Laud, Chief Investment Officer, LGIM
Julia Hobart: How does that change the percentage of women in other parts of the asset management industry?
Sarah Aitken, Head of Distribution, LGIM: There it’s a better picture. But we still have further to go. There are more women working generally. As Sonja said, there has been a perception in people’s minds that an asset manager is a technical role, and that word itself is very dry. There are many women that have the IQ and capabilities to be great fund managers, but the language may put people off. For example, women want to come into asset management to feel they add value and contribute to the purpose. They don’t want to be a ‘producer’.
Women really want to come into asset management to feel they add value and contribute to purpose.Sarah Aitken, Head of Distribution, LGIM
ESG is accelerating gender balance.
Julia Hobart: Has the rise of ESG and responsible investing helped to attract women in the industry?
Sonja Laud: When it comes to ESG-related roles within the investment teams, we have over 50% filled by women. Going forward as ESG becomes more integrated into the investment process, this should enable us to attract more women and we might see a higher proportion of women in the investment teams.
The other aspect is that responsible investing, sustainability and ESG more broadly highlights purpose and the role that asset management can play. This helps to change the perceived content bias, and again will appeal to many, but is certainly inclusive to women.
If you want to work in investments, you need an analytical mindset — that will never change. I think it’s about joining that up with how women are looking for the purpose. And ESG now combines the analytics with the purpose — which is amazing.Sonja Laud, Chief Investment Officer, LGIM
Cognitive diversity is advantageous.
Julia Hobart: According to a Citywire report, there is growing evidence that diverse teams perform better (in asset management). Do you have views on what makes for a good team?
Sonja Laud: With the incredible complexity of today’s stock market environment, you need a team that trusts each other and allows everyone to be heard. To be effective, you need a team environment where everyone feels able to say what they think. Mixed teams are more successful because you find a more balanced approach to meetings and decisions, even though it may be harder work along the way. There are also studies showing that mixed executive teams lead to better overall financial results of the firm.
Sarah Aitken: It’s often the broad range of perspectives of mixed teams that make the difference in the conversation and ultimately decision making. But of course, team members need to be prepared to listen. For example, risk-taking behavior between men and women can be different. So, from an oversight perspective you need a balanced approach to your assessment of risk and how you manage it.
Effective teams are built around the level of trust, intellectual honesty, and bringing out the best in everyone you have at the table — that to me is the key to success. You have to be trusting enough to hold each other accountable.Sonja Laud, Chief Investment Officer, LGIM
Where are we now
Julia Hobart: Is there any progress you would call out as to where the Asset Management industry is in 2022?
Sarah Aitken: I think how we worked during Covid has made a difference. It’s enriched people. It has also made a difference to men, who may have wanted to work one or two days at home, but were never able to express that pre-Covid.
In my view, facilitating a more flexible, agile approach to the way we work has been so powerful for women in the asset management industry. The original frameworks set up prior to the pandemic hadn’t changed workplace flexibility, but this could.Sarah Aitken, Head of Distribution, LGIM
Julia Hobart: If we could, I’d like to turn to LGIM. You have many women leaders within your company. How did LGIM get there?
Sarah Aitken: On arrival at a new firm, for me, it’s: Who is your CEO, what’s the strategy and what’s the culture? Of course, at the time I interviewed, I was very fortunate as the head of the business, who was a man, embraced ‘we are going to make it work,’ no matter your gender — and it was phenomenal. Critical was that this was enabled from the top and it wasn’t just about targets or quotas. It’s all about the top person driving the culture forward.
Making women’s lives work at work has been really important in attracting more women to the industry.Sarah Aitken, Head of Distribution, LGIM
Sonja Laud: All the things we said about the success of mixed teams leads back to it being credible, authentic, and delivered in a way that is driving the culture. For LGIM, this is why it’s been successful. It’s because of the genuine way diversity and inclusiveness is part of our company’s philosophy and culture, based on the belief that it will lead to a better outcome for our clients.
Lessons learned and opportunities
Julia Hobart: How did your career progress? Can we draw any lessons for how to do it better going forward?
Sonja Laud: My university had an amazing program — one year at Oxford, one year in Paris, and one year in Berlin, providing studies in three languages and in three countries, and you had an opportunity for an internship in every country. I had the opportunity to try out a mix of investment banking, consulting, asset management and marketing. I did global equities with amazing people at a major asset manager, and it was intellectually stimulating. And so that’s how I ended up in the asset management industry.
Sarah Aitken: When I look back, I probably took a few risks. I always liked to go to a place that has a challenge, and a strategy that I believed in. But essentially, I followed people — I’ve always followed people. And the judgement I make, and also what I say to people interviewing is: ‘You’ve got to look at it all, for example, how will it be when things go wrong?’ Will we be able to be as open and transparent? Will we be allies or pointing fingers? What are my chances of succeeding because of the quality of my colleagues?’ And this has given me huge satisfaction.
It’s not about hiring or selecting women candidates for the sake of women. It’s about ‘we want to do a better job for our clients, so what team do we need to make this happen.’ We are now 50/50 in leadership, but it’s more because of the genuine belief in what makes a good team.Sonja Laud, Chief Investment Officer, LGIM
Julia Hobart: When more women have a voice, does this change the culture and outcomes? And where does that begin, is it at a line manager level because they are really influential, or is it at a leadership level?
Sarah Aitken: You definitely need the right person at the top because it makes so much more of a difference and can open things up. There are some really good men that do this, as well as women. Of course, you then need to have women right through the organization. You absolutely do need women line managers, it’s so important.
Sonja Laud: In investment, we still have the biggest catch up to get there. You can have a brilliant fund manager or a brilliant risk taker, but they may not be a good people manager. The industry has been slow to understand this and pick it up. Traditionally, portfolio managers may have only been judged on performance, which can be measured, and the right skillset might not have been promoted to the head of the team.
Julia Hobart: You both said something very interesting: The person at the top is critical, and needs to be authentic and needs to want to make a difference. But what’s less critical is if the leader is male or female. That feels like balance!
How leaders in the asset management industry can be a conduit for change
Julia Hobart: In terms of going forward in the industry, what does good look like?
Sarah Aitken: Clients are now asking how many female fund managers you have, and it’s become a business objective. What good looks like, is mixed teams that really perform strongly. It’s that wonderful team chemistry, where you have the right mix of people, gender and backgrounds — all of it. To give you that broadest, diverse way of thinking. You can’t force this.
Sonja Laud: I’ve always said this is a marathon and not a sprint. The marathon is really about making sure that it is lived throughout the organization — from the top down. There needs to be a focus on diversity and inclusion. This drives the necessary frameworks, and drives the culture that will inevitably cascade to a better outcome.
If you don’t grow your talent base, you will be fishing from the same pool of senior women and your quota will run out of talent quickly. We know you need to make some conscious choices, such as in graduate recruitment — for example, how you do your selection process, how you raise greater awareness around cognitive diversity. This is not all happening naturally and there really needs to be a big effort to make it happen.
Accelerating future change.
Julia Hobart: I would like to get your thoughts on quick wins and longer-term things we can do. So, if we have this conversation in three years’ time, we will say, ‘yes we have made progress.’
Sarah Aitken: We need to be open and supportive of work-life balance. With an overall understanding ‘when flexibility and life is good, work will be good.’ I just feel the post-Covid 5-days-a-week-in-the-office would be a retrograde step. And being supportive at difficult moments is crucial. For example, when I had my first child, there was someone who reached out and showed support (at the right moment), and that kept me going.
We need to be open and supportive of work-life balance. With an overall understanding ‘when flexibility and life is good, work will be good.’Sarah Aitken, Head of Distribution, LGIM
Sonja Laud: There is more we can do to illustrate what it’s like to work in the Asset Management industry. ESG and responsible investing will be a big driver in allowing us to reshape that perception. Also, within an organization, it’s the establishment of a talent pool. For example, key ingredients include a focus on graduate recruitment, interns, career progression, and talent management. Lastly, there needs to be much greater intellectual honesty at the leadership level and at the ExCo level, in shaping that understanding about what a good culture and good teams look like.
We are living in a world of change. To really stay a successful team, you need to evolve with the changing business needs, and the changing clients’ needs.Sonja Laud, Chief Investment Officer, LGIM
Julia Hobart: Before we wrap up, is there anything you would like to add?
Sonja Laud: The need to look at diversity more broadly. This is true for the investment world, as we face a fundamental inflection point and complexity in global markets. Cognitive diversity, or the inclusion of teams that have different styles of problem-solving and can offer unique perspectives is something we need to spend more time on. To understand today’s world, you need to have a level of cognitive understanding and abilities as well as a global mindset.
Julia Hobart: Sarah and Sonja, thank you so much for joining us today. This has been a brilliant conversation.
Julia Hobart Partner
Sarah Aitken Head of Distribution, LGIM
Sonja Laud Chief Investment Officer, LGIM
Featured in our article
Sarah Aitken Head of Distribution, LGIM
Sarah is Head of Distribution leading all distribution in Europe, the Middle East, Africa and Asia. Sarah reports directly to the CEO. She joined LGIM in 2014 from Insight Investment, where she held the title of Head of Distribution. Prior to that, she worked at Merrill Lynch Investment Managers and JP Morgan. Sarah started her career at Cazenove as a UK equity analyst. She graduated from Corpus Christi College, Cambridge University and has an MA in History.
Sonja Laud Chief Investment Officer
Sonja Laud is Chief Investment Officer (CIO) at Legal & General Investment Management (LGIM) and a member of its Executive Team. She leads the firm’s entire Investment and Trading teams, setting the firm’s Investment strategy, with a focus on leading LGIM’s responsible investment efforts. Sonja joined LGIM in 2019 from Fidelity International where she was Head of Equity. Prior to that she worked at Barings where she launched and managed global multi-asset portfolios. Prior to that, she worked for Schroders where she managed, for eight successful years, several global, European and UK equity funds, with a focus on high-dividend stocks. Sonja started her career at DWS in Frankfurt, where she was an award-winning global equities portfolio manager. Sonja has completed a Global Executive MBA program at TRIUM (LSE, NYUStern, HEC) and has MSc, EMIM from ESCP Europe. She is a CFA Charter holder. She is a regular media commentator, appearing across broadcast including the BBC, Sky News, Bloomberg and CNBC.
Julia Hobart Partner, Oliver Wyman
Julia is a Partner in our Insurance & Asset Management practice in London. She joined Oliver Wyman in 2004 from Mercer, and has worked for more than 25 years in the investment field, as a portfolio manager and investment consultant before becoming a strategy consultant. Julia’s expertise spans the investment space: from business strategy to investment processes and operational effectiveness. In addition to working with clients, over the last several years, Julia has authored major reports for the World Economic Forum, Women in Financial Services, and Ten Ideas in Asset Management.
 Renee Neri, Emma Penny, Philip Williams. (2021). “Harnessing the impact of female talent in asset management,” Heidrick & Struggles. https://www.heidrick.com/en/insights/asset-management/harnessing-the-impact-of-female-talent-in-asset-management#REFN1
 Laura Lallos. (2020, March 2). “Women in Investing: Morningstar’s view,” Morningstar. https://www.morningstar.com/articles/967691/women-in-investing-morningstars-view
 Dr. Nisha Long, Angus Foote. (2021). “Alpha Female Report 2021,” Citywire. https://citywire.co.uk/alpha-female