Taking aim at private equity’s male persona

Level 20 is an important industry initiative to increase female participation in the alternative investment industry – aiming to boost diversity not for diversity’s sake, but to improve investment performance.

It’s no secret that financial services is a male-dominated business and private equity is no different. In 2015, women held only about 5 percent of the senior roles in the European private equity industry, according to Invest Europe.

The figure varies depending on data sets. Dubai-based TVM Capital Healthcare Partners founding partner Hoda Abou-Jamra shared data with PEI that showed 9.7 percent of senior European private equity positions were filled by women (while the equivalent numbers for US, Asia and the MENA region were 11 percent, 11.8 percent and – surprisingly – 18 percent, respectively.) 

Despite these numerical discrepancies, there’s no denying the need for greater gender diversity. Even in the US, the industry’s most developed market, women remain a fraction of senior management. Bloomberg data compiled in April showed that only 12 of KKR’s 93 senior executives were women, at Carlyle there were 37 women to 228 men and at Blackstone, the ratio was 58 to 312 executives.

A number of individual firms and industry groups are progressively working to redress this balance. The most recent is Level 20, a London-based non-profit, whose goal it is to increase the number of women holding senior positions in European private equity to 20 percent by 2020.

Launched by a dozen successful and well-known female LPs and GPs, Level 20 held its inaugural reception this week, welcoming 400 (mostly female) attendees from across Europe. In addition to formal networking, the group will also focus on mentoring and philanthropy related to its mission.

Driving its agenda is a conviction that more women in positions of influence will enable better IRRs: “We believe that increased participation by women in the private equity industry, especially in leadership positions, will lead to not only sustaining but also improving investment performance,” Level 20 notes on its website.

Certainly that’s what the evidence that has been garnered in public markets is pointing to. A survey of 3,000 listed companies conducted by Credit Suisse last year found that gender diversity in management roles correlated with “better financial performance, superior return on equity and higher stock valuation”.

There is no reason why private equity firms, or their portfolio companies for that matter, should be any different, and that’s why the Level 20 mission matters. Completing it won’t happen overnight, but the pressure on the hegemony of men is mounting.

What’s your view? Join us next month to debate these issues and more at PEI’s Women in Private Equity Forum.