The (lonely) view from the top: Dominique Mielle on surviving and thriving in the male-dominated hedge fund business
Having risen to become one of the only senior women in hedge funds, Dominique Mielle spent twenty years as a partner and senior portfolio manager at Canyon Capital, a $25 billion hedge fund. Named one of the Top 50 Women in Hedge Funds by Ernst & Young — and one of the Top 30 Power Women of The Room — she currently sits on several corporate boards and is a regular contributor to Forbes.
We caught up with Dominique to get her take on women’s advancement in hedge funds and the inside scoop on her upcoming book, Damsel in Distressed: My Life in the Golden Age of Hedge Funds, which offers a behind-the-scenes account of the industry and a unique perspective on how competition, technology, data, volatility, and regulations transformed the investing landscape.
Taking you back to the start of your professional journey, what drew you to the world of finance and a career in hedge funds?
It was fairly serendipitous, quite unlike the legend of many hedge fund managers who purportedly started trading in grammar school. I grew up in Paris, and my first job was a credit analyst position in New York, only because I wanted to move out and see the world. The second was at Lehman Brothers as an investment banker, mainly because I dated one and he spent most of his waking hours in the office. It wasn’t until Stanford Business School that I heard the calling of investing and hedge funds. What attracted me initially was the transparency and immediacy of it: making decisions and being judged on whether they are good or bad. It turned out to be a rather reductive view of the business, but it led me to join Canyon Capital in 1998. What kept me there for the twenty subsequent years was how wonderfully creative the job is, from researching a trade idea to structuring a bond.
In asset management and particularly in hedge funds, female participation at the top level is almost as non-existent today as it was when I started twenty years ago.
In an op-ed you wrote for Business Insider, you spoke about the experience of being called into HR on your first day as an investment banking analyst and told to follow the dress code of “no pants allowed” for women. How did this experience affect you? Did it serve as an introduction of sorts to the boys’ club within which you were operating?
It was a shocking introduction indeed. What bothered me was how backward and hare-brained this dress code was, and my immediate reaction was to rebel by wearing shorts. Not particularly mature, admittedly, but I am a sucker for making a point, often at my own peril. Strangely, sexism was otherwise not particularly notable to me at the junior level — all analysts were expected to be a sort of humanoid, processing senior bankers’ ideas some 60 hours a week. But it likely affected the leadership and strategy at the top. Only decades later, reflecting on the demise of the firm, did it hit me that part of the problem was the groupthink permeating the organization.
You are an ardent advocate for diversity in the top ranks of finance, having argued that “diverse groups make better decisions” and that the world of “finance is turning down money by turning down women.” Why do you think the industry has failed to realize this?
Saying that the finance industry as a whole has failed may not be nuanced enough. The number of senior women in commercial and investment banks has undoubtedly increased. But in asset management and particularly in hedge funds, female participation at the top level is almost as non-existent today as it was when I started twenty years ago. Part of the reason is that, until recently, hedge funds were delivering results — why would they change anything as a highly functional boys club? And since there were no female success stories, why would women apply? The vicious circle had to break — and it is beginning to.
“Women lack examples of successful women in investing… which I think leads women to opt out of the career path.” I set out to write the book for women to opt-in. I wanted to present a female success story.
How did you learn to survive sexism and misogyny in the workplace? What kept you going through it all?
I contend in my book that all women in finance have stomached some form of misogyny. But there is passive and active sexism. Passive sexism consists of preconceived ideas about women: clichés, hasty judgments, silly epithets. A good sense of humour, resilience, and the dogged belief that I was as good as, and better than, many male colleagues helped me get over it. It isn’t that hard. But I don’t know how one survives active sexism — harassment or discrimination — other than legal action and switching firms. In that respect, I was simply lucky. My firm’s founders trusted and respected me. Not to say that it wasn’t very lonely at times. Still, I was promoted to the highest level of seniority and consequently I was able to give the job my absolute best. One can only hope that my story ceases to be a lucky break and becomes the norm in hedge funds.
Would you say that it got easier over time, as you rose in seniority?
I would say the contrary. As I rose in seniority, there were even fewer women. It was more competitive at the top and I was more threatening. I felt that I had to outperform men to attract the same amount of capital. My hunch was confirmed when I read a research study, The Performance of Female Hedge Fund Managers by Rajesh Aggarwal and Nicole M. Boyson, which asserts that although the performance of female hedge fund managers is equal or better, they consistently attract fewer assets than men do. My last years as a partner were also under the Trump presidency. I felt, rightly or wrongly, that it coincided with an increased frequency of sexist behaviour in the workplace.
Trading is powerful in that it teaches you to accept failure as business-as-usual. You must accept it as just the flip side of positive trades. It’s a powerful way to build resilience.
In your excellent Forbes article, you wrote about the shifts that are taking place across many sectors, including the financial realm, with diversity in leadership positions slowly increasing. Are you hopeful that the situation is improving?
I am. The performance of hedge funds has been more elusive in the last decade, pushing investors and managers to question the business model — including the lack of diversity in investment teams. I always thought that the impetus to change would come from two fronts: pressure from the outside via institutional investors, and pressure from the inside via forward-thinking managers convinced by the overwhelming academic evidence that diversity makes money. There is undeniable movement on the first front, with Yale University endowment, for example, leading the charge as an investor requiring diversity from its managers. As to the internal pressure in hedge funds, it is more questionable.
We’re very excited about the launch of your new book — the first hedge fund memoir written by a woman! What made you want to write it?
I read a quote a few years ago from a business school student that stuck with me: “Women lack examples of successful women in investing. That makes it harder for women to visualize how a career in investing could work for them, which I think leads women to opt out of the career path.” I set out to write the book for women to opt-in; women and outsiders, that is, because I am also a foreigner. I wanted to present a female success story. The second motivation was to educate the layperson about the hedge fund industry and how it has dramatically matured and changed over the last two decades. And importantly, to do so in a (hopefully) entertaining and humorous manner, because let’s face it, most hedge fund books are dry as toast.
The job of investing is highly creative and it requires imagination, ingenuity, and guts — all qualities that women have in equal quantity with men.
How did you find the experience of writing it?
I realized after publishing an op-ed for Business Insider in 2018 that I enjoy writing, so writing the book was great fun. I worked with a terrific book coach to structure the story. What was less pleasant was the experience of having to find an agent and a publisher because it involves rejection — a lot of rejection. But the job of trading is powerful in that it teaches you to accept failure as business-as-usual. As a portfolio manager, you regularly lose money. You are repeatedly proven wrong, publicly and unambiguously. You look like a fool often. You must accept it as just the flip side of positive trades, a motivation to move on, make the money back and more, and find the next big win. It’s a powerful way to build resilience.
What are some of the key insights that you hope readers will take from the book?
I hope readers will let go of the sleezy dealmaker or geeky math wizard images lionized in the hedge fund literature and media. Good investments come from generating new ideas, innovative thinking and having flashes of intuition that connect the dots. Being a good listener and open-minded, capable of boiling down complicated facts into simple explanations, negotiating and multitasking — these are the qualities of a strong portfolio manager. The job of investing is highly creative and it requires imagination, ingenuity, and guts — all qualities that women have in equal quantity with men.
Finally, what advice would you give to women in finance who are seeking to rise up the ranks?
I am highly suspicious of one-size-fits-all advice and self-help books that propose formulas, as if life were a cooking recipe. I can only offer my story and hope readers will relate and pick and choose what suits their circumstances. What worked for me was, simply, to stick with it; care little for what others thought of me; and pick a partner and friends I could vent and rage with or ask counsel from — even if I discarded the advice. So, I guess what I am saying is that if you want my advice, reach out to me! We’ll talk specifics.
Dominique’s book is due to be launched on August 24th, 2021. You can pre-order it here.