Contrary to the commonly-held perception of private funds as a “boys’ club” where women have scant chance of making it to the top because of ingrained bias, industry insiders on a panel in London on Thursday argued that alternatives are less of a patriarchy than other male-dominated industries, such as law.
Part of law firm Cadwalader, Wickersham and Taft’s ‘Women in the City Programme’, the breakfast seminar – entitled Women in Investment Funds: A Fundamental Advantage? – sought to address challenges to women’s progression in the private funds industry.
“It’s less of an old boys’ club in the way that ‘we only take people who come out of these schools’ . I think to some extent that funds tend to be more meritocratic, and if you prove yourself you can rise,” said Karen McMaster, a partner in Cadwalader’s financial restructuring group.
“Resolving the issue of there not being enough women in the pipeline is something that might more easily produce change than top-down approaches which have had to be forced on more patriarchal-type institutions like law firms. Of course the two are related because graduates need to see that there are promising careers for them in funds, but I think that attracting more women to finance is key.”
Private funds’ flat structures and entrepreneurial culture should make it easier for women to find opportunities to shine.
“For the most part it’s still a relatively young industry, funds are structured to be nimble,” said Ingrid Bagby, a partner in Cadwalader’s financial restructuring group.
“Many of them are focused on one or two personalities, so it doesn’t take much to effectuate change. You’ve got basically two or three incredibly powerful people that you need to influence and then you know you can get something done.”
The panellists agreed that there are two key issues at play when it comes to the paucity of women in senior roles: attrition at the mid- and senior-level, and too few women joining the industry in junior roles.
One participant said the prominent secondaries firm where she works only hires at the senior associate and associate level, promoting from within for partner roles, meaning female employees have a fair shot at promotion to partner once they’re in the door.
However, as with the vast majority of private equity firms globally, the firm receives far fewer applications from female candidates, and those that do join don’t always stay.
Cadwalader has taken steps to address this attrition.
“As a firm, we are focused on helping women to best show their potential for partnership or promotion, and on the pipeline going into the legal field in general,” Bagby said.
“A few years ago Cadwalader started a formal sponsorship programme that pairs up pre-partner lawyers with the most powerful partners in the firm, many of which are male. These women are afforded assignments and high profile opportunities by their sponsor, which gives them greater visibility and opportunity for being viewed as eligible for promotion.”
The pipeline issue has to some extent been addressed in the legal industry; roughly half of law school students in the US are women. However, for private investment funds, which rarely hire straight from graduate school, there’s still work to be done.
“There is an opportunity for both law firms and funds to get women thinking about finance as a career from a younger age,” Bagby said.
“The firm is currently considering how it can inform high school students about financial services jobs, in a way that would enable these jobs to be viewed as approachable, interesting and achievable. This would create a bigger pool of candidates, as opposed to waiting until a candidate is in law or business school and trying to poach them from the clutches of a rival firm or fund.”