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Janet Cowell is used to being the only woman in the room. She was the first female state treasurer for North Carolina from 2009 to 2017, after serving two terms in both the Raleigh City Council and the state senate. Her public sector experiences inspired her second act as CEO of Girls Who Invest, a nonprofit dedicated to increasing the number of women in portfolio management and executive leadership in the asset management industry. She participated in the recent Wharton Global Forum in New York, where she joined the Knowledge@Wharton radio show, which airs on Wharton Business Radio on SiriusXM channel 111, to discuss why it’s important to get more women and minorities involved in finance — and other areas where they are underrepresented.
An edited transcript of the conversation follows.
Knowledge@Wharton: How did Girls Who Invest get started?
Janet Cowell: It was founded by a friend of mine, Seema Hingorani. She was with the New York City [retirement system] and interviewing money managers to manage money for that fund. She realized, “Where are the women? Where are the people of color?” It was just not evident in the room.
I got to know Seema because I was the treasurer for the state of North Carolina and had similar experiences managing the $100 billion for that pension fund. She wrote an op-ed in Bloomberg, saying maybe we should found a group called Girls Who Invest and get more women involved, because one of the chief responses by these firms sitting across the table was, “Well, we can’t find any women. We don’t get any resumes.” OK, we’ll train them, you hire them.
Knowledge@Wharton: How significant is the gender gap in this sector?
Cowell: Finance is certainly not a leading industry, as you might imagine. Women actually running money are less than 10%. Even in the mutual fund industry, where you’d think they have more consumer facing [jobs], so there would be more women, it’s 7%.
Knowledge@Wharton: What’s the core idea behind Girls Who Invest?
“We’re working on the pipeline and building an army of young women who are prepared and ready to go in the finance industry.”
Cowell: We’re working with young women right now who are starting with college. A lot of young women who are freshmen have no idea that the asset management industry exists. People have vague notions of banking, but they don’t really know what that means. So, it’s exposing them to the industry and the opportunities, and dispelling some of the myths about the finance industry or at least giving them a more holistic perspective. It’s not all the Wolves of Wall Street or some of these movies they’ve seen. And it’s not all about greed. Finance can be about social impact. As they start learning that, we have young women who have the quantitative skills and interest, and we train them. Then we get them internships.
Knowledge@Wharton: Your organization wants to see 30% of the world’s investable capital managed by women by 2030. How significant of a challenge is that?
Cowell: Obviously, that’s a big goal and there would have to be a lot of different streams of activities coming into play. We’re working on the pipeline and building an army of young women who are prepared and ready to go in the finance industry. You also need to have culture change within the industry because once they get there, there’s a huge drop-off, a lack of retention of women and people of color in the industry. So, ongoing culture change, better lateral entry programs for women and people of color. There’s got to be a lot of factors coming together to hit that number.
Knowledge@Wharton: Is the industry receptive to change?
Cowell: Yes, I’ve been very encouraged by the conversations I’ve been having with firms all over the country that are rethinking the model of how they hire. I think they know that what they have been doing has not been working. We’ve seen more firms starting internship programs earlier for undergrads.
“I’ve been very encouraged by the conversations I’ve been having with firms all over the country that are rethinking the model of how they hire.”
They’re starting to think more thoughtfully about coordinating their internship programs across the globe, making them more strategic, more experiential. We’ve seen that across private equity firms and groups that typically relied on investment banks to hire. They’re realizing if we wait to hire until people are 25 or 26, we’re never going to fix the problem.
Knowledge@Wharton: How much of this plays into the broader concern about inequality across society?
Cowell: Fundamentally, this is a business conversation. There has been study after study now that has shown diverse teams lead to better results at the firm level, at the asset management portfolio level. There’s certainly an intellectual understanding that diversity of thought in all its forms, including gender, is a good thing for business. Getting to the result is harder.
Knowledge@Wharton: Take us through the process of meeting with a young woman who has interest in being in this sector. What happens for her?
Cowell: We have a pretty robust application. We reach out to colleges and universities around the country. We are making special attempts to reach out to socioeconomically disadvantaged students. They fill out an application in the fall, including essays about personal challenges they’ve overcome, their grades, their activities, test scores. They also do a one-minute video and tell us why they want to be part of this program. We then review all of those. We had about 600 applications this year for 100 slots. This year, we’re going to do more targeted digital marketing, so I think we’ll have well over 1,000 to 2,000 applications.
It’s a 10-week program. We have four weeks on this campus. To Penn and Wharton’s credit, they stepped up to the plate for this program and said, “This is what we should be doing.” The students do presentation skills. They do a stock analysis. In Philadelphia, they picked Comcast as the company, so they go to Comcast and meet with the investor relations team. They work with securities analysts and ask all the questions. They make a stock buy-or-sell recommendation to an investment panel. They then go for their six-week internship with firms across the country and across all asset classes. We also have pension funds and college endowments. The Penn endowment and MIT endowment are both taking students. It’s a great opportunity, and it’s all paid.
Knowledge@Wharton: A lot of people associate finance with Wall Street, but there are so many other elements.
Cowell: Absolutely. We have an intern at the Bill and Melinda Gates Foundation who is helping manage money there. They have a huge global impact, so for students who are interested in that social impact, they can work at a foundation. We also have the Kresge Foundation. The Casey Family Foundation is taking interns. They’re deployed across the United States, and even a few in Canada. OMERS, the Ontario Municipal Retirement System, as well as PIMCO in London. So, we do have some interns in the U.K.
Knowledge@Wharton: There must be some phenomenal stories of success at this point.
Cowell: Yes, some of these women have come through real hardship stories. We’ve had some young women who’ve been homeless. We took a group to the Stock Exchange, and one woman called her mother. This was the first time she’d ever left the city and was telling her mother, “Oh, my gosh, I’m on the floor of the Stock Exchange.”
Knowledge@Wharton: What would like to see in the years to come?
Cowell: What a fun job to work with 18- and 19-year-olds who are bright and optimistic and absorbing it all like a sponge. To me, the combination of women and finance and education is just one of the most powerful on the globe. We’ve seen study after study. If women can manage their own money, then families are better, violence is reduced, nutrition goes up.
“The combination of women and finance and education is just one of the most powerful on the globe.”
This is at the top of the food chain, but if more women manage money at portfolios, you see greater diversity of hiring, more optimization of portfolio returns. It’s a better outcome with so many collateral benefits. We just want to keep growing the program. I think there are so many more talented young women out there that can’t get a seat, so next year we’ll expand again. Hopefully, it will be 150 young women, not 100.
We’ve also done online programs. We’re partnered with the CFA Institute. They offer about 200 foundations’ online courses, so that’s building another pipeline. We’ve got another 80 women doing the Wharton Business and Financial Modeling certificate course. We’ve got about 350 young women this summer, and next summer I’m sure we’ll be over 500. You just keep growing those cohorts, and I think you start chipping away and making a difference.
Knowledge@Wharton: Will this program go international at some point?
Cowell: We have gotten a lot of applications from very talented foreign students that we were not as able to accommodate in this program. But London, Singapore, Delhi — we’ve had a number of universities reach out to us that are interested about potentially starting international. We will definitely look at that and take that to the board and think about what’s feasible.