Diversity of thought

Private Equity International’s inaugural women in private equity roundtable in October started with a discussion on how private equity is becoming more gender diverse - slowly. The number of women in senior investment roles at UK firms, and in their European offices, has edged up to 11 percent from 10 percent in 2021, according to the latest diversity and inclusion survey carried out by Level 20 and the BVCA. Meanwhile, women now hold 37 percent of junior investment roles in UK firms, including European offices. Even so, progress remains sluggish, with 17 percent of firms still having no women at all on their UK investment teams. It is clear that while the asset class has taken strides in its recognition of the value that gender diversity brings, it still faces significant challenges in redressing the balance.

In Europe, the Sustainable Finance Disclosure Regulation has provided a natural push towards greater transparency, which has in turn encouraged enhanced tracking of diversity statistics. Nicola Goll, regional head of the Americas for the multi-manager private equity team believes that providing women with coaching as they progress through their careers can be effective as it boosts engagement with female talent – not only through dedicated female networks, but by offering hard skills. She adds that there has already been a real shift towards leveraging greater diversity of thought in the industry over the past decade, and not just in terms of gender. “Junior team members are encouraged to share their thoughts at meetings and senior colleagues have learnt to listen, for example.”

Of course, increasing diversity and inclusivity within the industry is not the only challenge that private equity is facing right now: it is also embroiled in one of the most difficult fundraising periods in memory. While macro and geopolitical issues – ranging from labour shortages and inflation to war in Europe and concerns over exposure to China – are playing an increased role in investment committee discussions, multi-manager fund of funds platforms might actually benefit from the current dislocation.

“We have seen increased appetite as smaller regional investors that might have invested by themselves in a bull market grow more cautious, therefore looking for a partner to help with private market allocations. Some are looking to outsource that responsibility and are happy with the broader diversification they are getting via multi-manager portfolios. We are also seeing exciting opportunities to co-invest as GPs look for higher equity coverage, given the cost of debt.”