WEBVTT - Emerge Encourages Female Fund Management

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<v Speaker 1>You're listening to Bloomberg Business Week with Carol Messer and

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<v Speaker 1>Tim Stenovic on Bloomberg Radio. So we had a Bloomberg

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<v Speaker 1>story last week. You talked about how the six and

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<v Speaker 1>a half trillion dollar US et F industry boomed last year,

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<v Speaker 1>but the fanfare revealed a major flaw in the space,

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<v Speaker 1>the lack of women helping the funds enter emerge. It's

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<v Speaker 1>a Toronto based independent fund manager with an affiliate in Buffalo,

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<v Speaker 1>New York. This firm striving to improve those figures with

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<v Speaker 1>one of the first all women exchange traded fund investment

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<v Speaker 1>teams in the United States. We've got two members of

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<v Speaker 1>the Emerged team with us right now. We welcome Lisa Langley,

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<v Speaker 1>CEO and founder of Emerged Capital Management, and Kate Faddis,

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<v Speaker 1>senior portfolio manager at Fernwood Investment Management. It's an Emerge

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<v Speaker 1>empower subadvisor. Both joined us on the phone. Lisa's and

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<v Speaker 1>Buffalo and Kate is in Boston. Lisa, I want to

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<v Speaker 1>start with you, um, just just bring us an idea

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<v Speaker 1>of how this all came together. Good afternoon, Tim and Carol,

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<v Speaker 1>thank you so much for having us on. We have

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<v Speaker 1>been working on empower and trying to raise the profile

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<v Speaker 1>of women portfolio managers for several years. We needed to

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<v Speaker 1>do it in an impactful way to send a big

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<v Speaker 1>message to the industry. So on September eighth and ninth,

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<v Speaker 1>with four talented subadvisors and five et s, we launched

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<v Speaker 1>five in the US and five in Canada over the

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<v Speaker 1>span of two days. Uh and it was very exciting,

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<v Speaker 1>And that's really what we want to do, send a

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<v Speaker 1>message that this is possible, that women deserve the attention.

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<v Speaker 1>And these are all senior talented managers. So so Li said,

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<v Speaker 1>think I well, and I think I knew the answer,

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<v Speaker 1>but I'm going to ask anyway, because maybe I don't.

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<v Speaker 1>Is this, as you said, you want to send a message.

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<v Speaker 1>Is it also important though, getting assets in and getting

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<v Speaker 1>some traction here and then performance as a result a

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<v Speaker 1>dent Carol, We have to show that we can earn

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<v Speaker 1>our plates at the table. We're not asking for charity

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<v Speaker 1>because we're happen to be women portfolio managers. We just

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<v Speaker 1>want to have a shot. We just want to earn

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<v Speaker 1>our place. The biggest issue in the industry is that

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<v Speaker 1>there's a lack of disclosure. You know, all the evidence

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<v Speaker 1>and the numbers that tell you, okay, only eleven percent

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<v Speaker 1>or women portfolio managers, or two percent of strategies or

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<v Speaker 1>five percent of assets. It all comes from self reported

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<v Speaker 1>numbers and institutional databases. It's crazy. Yeah, transparency we you know,

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<v Speaker 1>we talked about this just generally in terms of E.

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<v Speaker 1>S G and understanding what that means. But you're right,

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<v Speaker 1>the transparency within all of this is highly lacking. Ky,

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<v Speaker 1>come on in. Uh, This story by Peyton Forte of

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<v Speaker 1>Bloomberg News definitely caught our attention. Come on in. Though

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<v Speaker 1>you're a subadvisor to Empower, tell us about you know,

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<v Speaker 1>your interest and you're wanting to be involved in this. Well,

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<v Speaker 1>I love I love the investment business, I love managing money,

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<v Speaker 1>and for me, this is an amazing opportunity. And Lisa

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<v Speaker 1>I felt very fortunate to be included, and I said,

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<v Speaker 1>why not, let's do it. What has been the reception

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<v Speaker 1>so far as you're as you're out there, Kate, I

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<v Speaker 1>think it's been overwhelmingly positive. People, uh, you know will

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<v Speaker 1>snarkily say I don't care about male female, I just

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<v Speaker 1>care about performance. We know that's not really true. So

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<v Speaker 1>tell us a little bit of tell us a little

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<v Speaker 1>bit about that, because Carol and I run into this

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<v Speaker 1>all the time when we talk about how how companies do,

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<v Speaker 1>and hey, we're just getting started when it comes to

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<v Speaker 1>earning season right now, and we see stocks get punished

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<v Speaker 1>if they miss on the top line or on the

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<v Speaker 1>bottom lines. So we know that people really care about performance,

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<v Speaker 1>but what what data do you have to show that

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<v Speaker 1>they care? They care also about the other fundamentals, right,

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<v Speaker 1>I mean, I think people are saying they don't care

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<v Speaker 1>about the other fundamental but I think they actually do.

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<v Speaker 1>So they'll you'll hear comments like, oh, well, this is

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<v Speaker 1>just about identity politics, and then I say, identity politics

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<v Speaker 1>has been happening for a hundred years. You have you

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<v Speaker 1>had a woman in the wife house, not because or

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<v Speaker 1>you or anything else, not because not no one was qualified.

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<v Speaker 1>So these things are important, and when you call it

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<v Speaker 1>out and put a highlight on it, you're not asking

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<v Speaker 1>for a handout. You're just saying there's maybe a different

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<v Speaker 1>reason that women haven't gotten these positions. It's not because

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<v Speaker 1>we're not qualified. No, Lisa, listen, you're preaching to the choir.

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<v Speaker 1>Totally agree, and you know, Lisa, we want to bring

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<v Speaker 1>you back into this. I mean Tim and I and

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<v Speaker 1>many here at Bloomberg have spent years talking about the

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<v Speaker 1>Mackenzie studies, the other studies about the importance of diversity

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<v Speaker 1>UH in boardrooms or just generally at companies and how

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<v Speaker 1>that improves financial performance. And so I just kind of

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<v Speaker 1>I'm like, I don't get it. It's out there. Why

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<v Speaker 1>aren't we seeing more diversity, more women involved, But it's

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<v Speaker 1>more diversity in general when it comes to running investment teams.

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<v Speaker 1>So you know, lay it out for us UM in

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<v Speaker 1>terms in terms of why I understand you wanted to

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<v Speaker 1>send a message, but why it's taken so long for

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<v Speaker 1>more of this to happen Because they're not No one's

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<v Speaker 1>being called out on not reporting on diversity because there

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<v Speaker 1>isn't any regulatory or legally compulsory requirement to disclose who's

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<v Speaker 1>running money under the hood. We have like the name

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<v Speaker 1>of a team we have, you know, to what you

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<v Speaker 1>were just saying to him. You know, we can track

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<v Speaker 1>performance six ways the Sunday. We know all the widgets

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<v Speaker 1>under the hood inside of a fund, but we really

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<v Speaker 1>don't get after who that team is. And it's not required.

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<v Speaker 1>It's only self reported into institutional databases. According to investment.

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<v Speaker 1>Only nine of firms are reporting that information, and they're

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<v Speaker 1>the smallest firms that represent less than eight percent of

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<v Speaker 1>the assets of the thirty seven trillion that are reported

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<v Speaker 1>on the investment. At least, it's a tough time to

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<v Speaker 1>to sort of have a new fund, to be launching funds.

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<v Speaker 1>How are you looking at the environment right now? I

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<v Speaker 1>think the environ you have to come out in the ashes.

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<v Speaker 1>You know, I've launched new things before, you know, when

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<v Speaker 1>the towers you know, fell nine eleven, And I believe

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<v Speaker 1>that I want to get attention in two to really

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<v Speaker 1>have a value proposition. And it's so competitive, as you know,

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<v Speaker 1>you were talking, you know, Carol about the growth of

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<v Speaker 1>the industry. It's fast paced. There's a lot going on

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<v Speaker 1>here right a global compound annual growth rate of on

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<v Speaker 1>e t s. So we said, okay, we're gonna come

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<v Speaker 1>out with all women managers, all experienced senior managers over

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<v Speaker 1>twenty years of experience, all actively managed doing fundamental bottom up,

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<v Speaker 1>all concentrated portfolios, and a heavy duty sustainability overlay that's

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<v Speaker 1>run by the emerged team. We did a lot of

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<v Speaker 1>groundwork and research and institutions and Burger dealers told us

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<v Speaker 1>that's what they wanted, So we're really just trying to

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<v Speaker 1>round the wagons and collect on all these promises that

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<v Speaker 1>they'd be there to support us. Hey, basic question, and

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<v Speaker 1>just got about a minute left here, Um and Kate,

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<v Speaker 1>let me just bring you back just quickly. I mean,

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<v Speaker 1>what kind of money are we seeing coming into the

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<v Speaker 1>e T S. I know it's early on, but what

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<v Speaker 1>kind of flows are coming in? That's really a question

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<v Speaker 1>for Lise though. Okay, forgive me Lisa, come on back. No, no,

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<v Speaker 1>I mean we're early into it. We launched in September,

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<v Speaker 1>very rough market, as you know, from men to the

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<v Speaker 1>end of the year, we're probably, you know, to be

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<v Speaker 1>quite honest, blows are in the three million range, though

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<v Speaker 1>certainly not Uh you know, we haven't hit our goal.

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<v Speaker 1>But I believe that all the conversations that we have

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<v Speaker 1>and all the institutions that said they would support us,

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<v Speaker 1>I believe they most definitely will. Uh. It's too important.

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<v Speaker 1>All of these managers have long track records, so you know,

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<v Speaker 1>they earned their place at the table, and we'd love

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<v Speaker 1>to tell more at Emerge the m dot com or

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<v Speaker 1>sending an email support and Emerge the M Doctor. All right, well,

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<v Speaker 1>good to check in with you. I will say, all

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<v Speaker 1>but one are outperforming the smp F under since they launched.

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<v Speaker 1>All right, well, good to hear that. Lisa Langley, chief

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<v Speaker 1>executive officer and founder of Emerged Capital Management, and Kate

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<v Speaker 1>faddis Uh, senior portfolio manager at Fernwom Investment Management