Private equity lags on gender diversity

Gender GapIn May, George Anson, the head of the European Private Equity and Venture Capital Association, was ‘murdered’. There were about 100 witnesses to the crime that took place at a Guildford hotel.

“Poor George got killed,” said Kathleen Bacon, a managing director at private equity fund of funds Harbour Vest, who explained this was no heinous homicide, it was a murder mystery game. Anson was bumped off at the first event for the Women in Private Equity group, a 300-strong collective of women set up by Bacon and a group of female industry execs.

The event was also attended by well-known male industry figures like 3i Group’s managing partner Alan Giddins, BC Partners’ managing partner Stefano Quadrio Curzio, and Charterhouse Capital Partners’ managing partner Lionel Giacomotto, as well as representatives from IK Investments, Nordic Capital and Permira, among others according to Bacon.

“What was fun about the night was there were about 80 women and 20 men, so we kind of flipped the ratio around” said Bacon.

Murdering senior male executives might be going a bit far, but the acute lack of women in the senior ranks of private equity certainly appears to be worth addressing. Research by Financial News’ sister title, Private Equity News, shows the industry as a whole still has a mountain to climb when it comes to getting more women into private equity, particularly in senior roles.

No female partners

Private Equity News asked 25 of Europe’s best-known private equity firms for figures on the number of female investment professionals and partners they had. The results showed although many private equity firms have expanded in size in the past decade and broadened their activities away from buyouts to debt management, infrastructure and secondaries, the industry remains pretty homogenous.

Eight of Europe’s biggest buyout firms have no female partners in their senior leadership ranks at all. These firms are Charterhouse, CVC Capital Partners,Bridgepoint, Inflexion Private Equity, PAI Partners, Nordic Capital, Arle Capital Partners and Dunedin. Collectively these eight firms control billions of euros and companies as diverse as Pret a Manger to Virgin Active.

A spokesman for Bridgepoint said the firm had previously had female partners and “wanted to see a better gender mix in our industry and are addressing this. In as many months, we have hired five female executives”.

A spokeswoman for Arle added: “Arle is still a relatively new team which will develop over time and although we don’t currently have any female partners, 50% of the combined operations and investment teams (directly under partner level) are female”.

A spokesman for PAI Partners pointed out that the firm has previously had women in its partnership and that it was unusual for the firm to have no female partners.

Montagu Private Equity, BC Partners, Charterhouse and CVC also all performed poorly in having low levels of female investment executives, with women making up 6% or less of these positions at all of these firms.

Inflexion, Montagu, BC Partners, Charterhouse and Dunedin declined to comment.

Overall, our research showed of 1,133 investment professionals at European buyout firms, 134 are women or about 12% of the total. Further up, those numbers get more squeezed. There are 411 partners at the surveyed firms, including in non-investment positions such as CFO, of which 34, or 8%, are women. It was a similar story for partners who own a chunk of the business, known as equity partners. Of the nine firms that disclosed what proportion of their equity partners were female, women made up 10, or 9%, of those 111 equity partners.

This is broadly in line with the FN 100 list of the most influential people in European capital markets, but compares unfavourably to other industries, such as law where 19% of partners across the UK’s law firms are women, according to research published last year by The Lawyer magazine. On the boards of FTSE 100 and FTSE 250 companies the number of women is 21.6% and 16.3% respectively, according to figures from BoardWatch.

A report by the Equality and Human Rights Commission last year said that women working full time in financial services earned up to 55% less in gross salary per year than their male colleagues, as they were “substantially under-represented in the higher-paid managerial jobs”.

Anecdotally in investment banking, it seems to be a mixed picture. For example atLloyds Banking Group, 27% of its board are women and the bank has a target to get 29% of its senior roles filled by women in 2014, according to its last Responsible Business Report published in 2013. At Goldman Sachs, two of its 13 board directors are women, according to its website. Last week it was reported by the Wall Street Journal that Goldman Sachs promoted 23% fewer females than males to the role of vice president between 2004 and 2008 and pays its female vice presidents an average of 21% less than their male counterparts, according to allegations made in legal documents as part of a civil lawsuit against the company.

However, there were some standout performers from the survey. For instance, at Permira, Inflexion and Electra Partners over a fifth of all of their investment professionals were women. While Silverfleet Capital, The Business Growth Fund and Isis Equity Partners all performed well in having women in senior positions, with women making up more than one-fifth of each of their partners or senior management team.

But any female advancement may also be up against the secretive nature of the industry. Five of the 25 firms refused to disclose how many female executives they had, meaning information had to be taken directly from their websites. They were: Bridgepoint, Charterhouse, CVC, Isis Equity Partners and IK Investment Partners.

A spokesman for CVC said: “Our policy is not to comment publicly on personnel matters.” While Bridgepoint, Charterhouse, Isis and IK did not respond to requests for comment.

For a full list of all 25 firms we surveyed and their results, go to

Need to focus on family

Neil MacDougall, managing partner of Silverfleet Capital, said he was “not really surprised” by the findings. He said as private equity is deal focused, it was hard to achieve a good work-life balance making it difficult for those who had to care for young families.

“When I left the office last night, two of the people were in for an all-nighter,” he said. “That illustrates the difficulty of managing work-life balance. When a transaction needs to be done quickly, you need a strong support network behind you, if you have anyone else to look after other than yourself.”

He added there needed to be some flexibility and allowances made for women with young families, and said that Silverfleet often allowed partners to be co-leads on deals.

“Firms need to recognise there is something that needs managing here. You are making allowances in that period that will hopefully pay back once the children get a bit older,” he said.

Anne Glover, chief executive of Amadeus Capital Partners, said the figures were “slightly better” than she was expecting.

She said: “Women in their 30s and 40s have to be 150% committed to a career in financial services, which is exactly the time women need to focus on having a family.”

She said that private equity firms had the added complication of being small operations. “The investment banks have really struggled with this problem and worked hard on how to provide child care etc; but they are very large institutions. The problem with private equity is that they are really boutiques and are small. You would need a more supportive environment and that’s only credible if some women get to the top and argue for it. You also need to be able to let women re-enter the industry after a career break.”

Jane Houghton, a director at the British Private Equity and Venture Capital Association, said firms needed to find better ways to support women who wanted to re-enter the workforce after having children.

Houghton said: “It’s one thing getting women into the industry but keeping them, especially when they have had children is a massive challenge. Smaller firms don’t have the infrastructure in place to support that process and because it’s so male-dominated they don’t quite understand the issues that women face coming back to work [after they have had children].”

But practical steps that firms can take to tackle the issue are difficult to come by. Bacon argued that firms may need to make allowances for women in their 30s in deal-making positions, allowing them to be co-leads on transactions.

“I do think that the system needs to address that 29 to 39 period when you don’t have all the time because the kids are sucking all the energy out of you. If you are on the GP side when a deal hits that’s it, you are 24/7 and it could be for three weeks or three months. If you can get through that process once your children are teenagers, you can multitask.”

 But Bacon is hoping that George Anson’s murder will not be in vain, with more events in the pipeline for the new women’s group.

“We’re hoping that this is the start of something bigger” said Bacon.




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