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"According to a 2016 study by Private Equity Recruitment (PER), less than one third of private equity staff are women, with men accounting for 68% of the industry's workforce. More strikingly, at partner or director level, the percentage of female professionals plunges to just 10%, while at senior partner or managing director level it falls further still to 7%."
PER managing director Gail McManus adds that there is a growing recognition that investments across a range of businesses require a diverse team. She says: "When it comes to deal sourcing, there is reasonable concern that you will be most likely to invest in a business that you yourself might use. If your workforce is not diverse, that could mean you are missing out on – or not truly appreciating the value of – other companies that are less familiar to you."
"Private equity tends to recruit from a very select pool of talent," says McManus. "Firms will typically hire people who have worked at one of the big four doing transaction advisory work, or have come from investment banking, strategy consultancies and due diligence. While those type of recruits might not have a background in private equity, they will have been involved in private equity transactions. That pool of industries also has a predominantly male workforce."
McManus says: "There is a self-perpetuating problem that, because most private equity firms are very small with 10, 15 or possibly 20 employees in the office, those making the recruitment decisions are inclined to hire people with backgrounds similar to themselves. That's because they feel there is more likelihood of the person they hire being the correct fit for the team. So the issue is not an easy one to resolve."
"The issue is no longer simply a case of how many females there are in private equity, but where those women are," McManus says. "There has been a notable change in attitude across the industry. Many of my clients now demand that they see a 50-50 male to female split of candidates. There have been big strides made at analyst and associate level, where women now account for around 25% of the workforce at GPs, but they virtually disappear beyond those mid-level positions."
"There is generally very little movement into private equity at a senior level," says McManus, "so it is important that women are able to move up the tree in the same way as their male counterparts. It takes around 10 years for a private equity professional to reach director level and the industry therefore needs to become good at retaining, promoting and supporting women if it is to address this issue."
By Kenny Wastell, Unquote"