Hedged Out: Inequality and Insecurity on Wall Street

Sociologist and former hedge fund analyst Neely (Divested) delivers a clear-eyed assessment of hedge funds as engines of inequality. Drawing on interviews with hedge fund workers, Neely argues that hedge funds’ emphasis on profitable networks and mastery of managed risk elevates well-connected white men while “hedging out” women, people of color, and those from working-class backgrounds. She explains how widespread investment in unstable markets have helped create a more precarious economy, and argues that, despite their cultural emphasis on individual savvy, the social fabric of hedge funds are organized around trust and loyalty; as a result, individuals who fit with the overwhelmingly white and male culture are granted access to lucrative and powerful positions, while others are either rejected or channeled into less prestigious positions. People of color are often directed to riskier or lower-profile funds, Neely finds, while women are nudged into client-facing positions often referred to as “the mommy track.” A clannish mentorship process that reinforces the power networks between highly respected fund founders and their chosen intellectual and status heirs in the business also contributes to this “classed, gendered, and racialized system masquerading as a neutral meritocracy.” Though somewhat repetitive, Neely’s analysis is on point and fair-minded. Finance industry workers and those aspiring to join the industry should consider it essential reading. (Jan.)