Even with signs of a potential economic slowdown emerging globally, private equity (PE) has continued to remain flush and is upping its search for new talent. But as PE firms seek to attract investing professionals, as well as bring on the right management teams and boards for portfolio companies, what will this talent look like, particularly from a gender perspective?

As a segment of the banking and investment world with a historically male-dominated culture, PE has traditionally lagged behind other industries in having women rise to top leadership roles within firms. Of the senior positions in PE, only 9.4 percent are held by women, according to Preqin. As per Catalyst’s review of the full range of S&P 500 companies, women make up 26.5 percent of executive or senior-level managers. The largest PE firms generally have only one woman represented on their board, and this gender imbalance has extended to PE firms’ portfolio company boards – which are largely composed of investors who can oversee operations shielded from the public spotlight and public pressures.

But one of the key strengths of the PE industry is its ability to be nimble when necessary, adding real value to an investment. We are seeing a convergence of factors working to shift PE firms’ calculation of the value in bringing more women into leadership roles. This shift means that women could well make a significant jump in numbers across these positions of influence – a jump that would add value to PE investments and reap the kind of returns these firms demand.

Private investment not immune to public pressure

A key driver in PE’s recent self-reflection about its gender imbalance has been the voice of major investors, a number of whom have conducted highly publicised campaigns around the issue over the past two years. From BlackRock and State Street, to US pension giant CalPERS, top movers in the markets have issued proxy voting guidelines explicitly calling for more women to be added to company boards.

Jan-Mar 2019 Issue

Atlantic Street Capital