Women are under-represented in the private equity industry relative to the UK’s workforce and more should be done to widen participation, according to research from lobby groups.
A report by the British Private Equity and Venture Capital Association and Level 20, which surveyed 179 PE firms representing around 5,000 employees, is the first of its kind to document the number of women working in the industry.
It found just 6 percent of senior investment team roles are held by women and that women comprise just 29 percent of the private equity workforce, compared to 48 percent of the wider UK labour force. Private equity’s 6 percent representation compares particularly poorly with the corporate world, where 28 percent of board-level roles at FTSE 100 companies are held by women. Level 20, an advocacy group for women in private equity, is working to increase to 20 percent the number of women in senior investment roles in the industry.
Outside of senior level positions women are also significantly under-represented in investment teams, with just 14 percent of investment professional roles held by women. By contrast women comprise 60 percent of the non-investment role workforce. The numbers are slightly better for mid and junior-level roles, with 15 percent of mid-level roles (directors, principals, vice-presidents) and 27 percent of the junior roles (associates, analysts) staffed by women.
The report found a correlation between size and gender representation, with smaller firms likely to employ a larger overall proportion of women. However, firms with fewer than 10 employees are more likely to be dominated by men-only investment teams, while there are no male-only investment teams at large firms.
The report commissioned focus groups to study some of the causes of gender imbalance in the industry and found that a smaller pool of talent, ‘mirroring’ at the senior level (men employ other men they know), a lack of openings and the perception of poor work/life balance as drivers for the lack of diversity. The report said LPs have a key role in driving change at the firms which manage their money.
“It has been proven in many instances that greater diversity in leadership styles and decision-making drives better performance and investment returns. Now is the time for the industry to drive change and show how it will achieve, and indeed surpass, the 20 percent objective set by Level 20,” said Cheryl Potter, BVCA vice-chair and a partner at Permira.
The BVCA recently supported the UK Treasury’s efforts to address gender equality and promote more women into finance leadership positions. Launched last March, The Women in Finance Charter asks financial services firms to commit to four industry actions to prepare their female talent for leadership positions. While the UK’s private equity industry body has signed up, its members appear less keen. The charter is still waiting for its first private equity signatory.