The private equity industry needs to make sure it contributes its “fair share” in addressing social imbalance and climate change, Eurazeo chief executive Virginie Morgon said in her opening remarks at the IPEM 2020 in Cannes on Tuesday.
“We are facing a crucial moment in time; we see two enormous challenges not just shaping the world but completely destabilising it,” Morgon said. “The first one for me is inequality – inequality on all fronts, inequality in wealth creation, inequality in access to education, inequality in access to wealth. And the second one is the enormous risk and the cost as a consequence of climate change.”
Along with the industry’s size, global reach and expertise comes an enormous responsibility, she noted.
“We have to understand that we are right there. It’s not the banks anymore, it’s us. If something was going to happen of a different nature with what happened in 2008, 2009, I do know and I am sure you share that, that we will be front row … meaning governments, regulators will come straight after us.”
In her speech, Morgon also asked GPs to heed the call for a radical shift toward sustainability and gender diversity. First is by measuring financial performance on all fronts – producing ambitious environmental, social and governance targets, measuring and publicising the results, as well as hiring the right people to make it happen. Second is by being a long-term partner for entrepreneurs and management, as well as by putting climate change action at the core of what firms do.
Morgon also highlighted the “enormous effort” the industry has to make on gender diversity, citing data from Harvard Business School, which revealed only 6 percent of decision-makers in the industry are women.
“I don’t think we can be proud – even in Europe – of what we have achieved so far. The worst I think is about how many women entrepreneurs we are financing in Europe and in the US – 2.2 percent. It has to be a joke. It’s a disgrace. We have to face it. We have to make some changes,” Morgon said.
She noted that European private equity players are also at a time to “voice over and show how much we have done, how much transformation we have already brought to our companies because in the US the PE industry is under fire”, noting US senator Elizabeth Warren’s heavy criticism of private equity.
“We better be ready to show how much we have helped … not just to make money and [generate] returns for our LPs and shareholders, but also to transform the economy in which we invest,” she said.
Paris-listed Eurazeo manages about €18 billion of assets and ranked 48th in the latest PEI 300 list of the largest private equity firms by sums raised over the past five years.
Read our 2019 profile of Eurazeo here.