At a time when there is an increased push towards diversity in all sectors of industry, a new report shows private equity’s lack of gender diversity, a clear dearth of women in senior investment roles and an increase of all-male investment teams. Analysis of more than 1,000 private equity and venture capital firms across continental Europe has found that only 20 per cent of investment professionals are women, with the figure falling to 10pc at the senior level.
At a senior level, all countries apart from Ireland had representation at or below 15 per cent, according to the findings shared with Private Equity News by Level 20, a not-for-profit organisation dedicated to improving diversity in private equity.
Germany had the lowest proportion of women in senior investment roles at 4 per cent. Spain and France were above the average with 13 per cent and 15 per cent respectively. The UK is in the middle with 10 per cent representation, according to a report. Level 20 warned that all-male firms are a challenge for the sector in Europe, with 38 per cent of firms on average having all-male investment teams.
In Denmark and the Netherlands, 65 per cent and 58 per cent of investment teams respectively are all men. Only France has below 20 per cent all-male investment teams, at 18 per cent. Signs of progress appeared at the junior level, where women represent 34 per cent of investment professionals, indicating that diversity levels could rise in the future if the sector continues to take steps to encourage the retention and promotion of women in investment teams.
Junior female representation was highest in Sweden and Norway at 43 per cent, while the Netherlands, Denmark, Italy and Switzerland all came in lowest with less than 30 per cent representation.
“The important number for me is the number of junior investment professionals. If that number is low, then it’s difficult to fix the other numbers. In some territories where they haven’t got the attraction right, if (the junior level representation) is under 30 per cent, we need to help them to make private equity an attractive career for different people,” said Pam Jackson, Level 20’s chief executive.
She added: “The issue is looking at what this younger generation wants, and making your firm inclusive and culturally attractive to a very different group of people to the ones who set up private equity firms in the 1980s.” The analysis spans 13 European countries and includes data from more than one thousand private equity and VC firms employing more than 9,000 investment professionals in 2022, rising to 14,000 when combined with UK data that was collected in 2021. VC firms have a higher proportion of female investment professionals than PE firms (22 per cent and 18 per cent, respectively), except in Finland (15 per cent and 21 per cent respectively).
Having established a baseline for gender diversity across Europe, Level 20 said that it plans to use it to identify areas where debate, discussion and potentially intervention might assist in achieving improved gender diversity across the industry.
“We all know PE likes a bit of benchmarking. I’m hoping that GPs (general partners) will pick it up and ask where they fit and how they are doing. The other debate is how LPs (limited partners) pick it up, and ask how they measure people against this,” said Jackson.
She added: “We don’t want people bashing firms, especially as they often have very slow turnover of staff. But it is just having a dialogue about why a firm is where it is, and if it’s behind the curve, what are it’s plans to attract, retain and promote.”
andyjalil@aol.com
(The writer is our foreign correspondent based in the UK)
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