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Where Are All the Women in Private Equity?

If private equity dealmakers are a tiny economic elite, they are a narrow one, too. A Bloomberg analysis found that women fill only 8% of senior investment roles globally at the 10 largest firms that use debt to buy companies. Only one or two women are present in top positions on the buyout investment teams of most firms, which are generally made up of dozens of executives. “There is a huge retention problem, since nothing has materially changed at the top,” says Nori Gerardo Lietz, a senior lecturer at Harvard Business School. “Firms ought to be asking themselves why.”

If they don’t, clients might force them to—eventually. The explosive growth of the asset class has been fueled in part by big checks from large public pension plans, some of which have been vocal about social responsibility. More are questioning managers on their diversity numbers, but few have used their checkbooks to force change.

Bloomberg’s analysis found that Carlyle Group LP put the greatest number of women in senior investment roles, 15, while TPG had the biggest proportion, with women accounting for 14% of its team. Apollo Global Management, CVC Capital Partners, and Hellman & Friedman each had one lone female making investments.

Bloomberg counted the heads of business and the two most senior titles on buyout teams of each firm. The data did not include other asset classes such as real estate, infrastructure, and credit.

Apollo raised the largest buyout fund on record, $24.7 billion, in 2017 and counts California State Teachers’ Retirement System, New York State Common Retirement Fund, and Oregon Public Employees’ Retirement Fund among its largest investors. An Apollo spokesperson says the firm is strongly committed to continuing to improve diversity across its business.

Some of the firms analyzed have put women in leadership roles in other parts of their organizations, including those that invest in real estate, infrastructure, and credit. At Blackstone Group Inc., Kathleen McCarthy is co-head of the $154 billion real estate group. But PE firms seem to have struggled more than other kinds of asset managers, including venture capital and hedge funds, to boost their number of women in general, according to a study earlier this year by data provider Preqin. Women are found mostly in investor relations, marketing, and finance roles at PE firms, the study finds.

Data: Bloomberg reporting Note: Bloomberg counted heads of business and the two most senior titles on buyout teams of each firm. List comprises Preqin analysis of the largest buyout firms based on capital raised in last 10 years. Data doesn’t include other asset classes such as real estate, infrastructure, and credit. Includes impact funds.Women’s Share of Senior Roles Making Buyout Investments

Especially scarce are women running or co-managing buyout businesses—the historic heart of private equity and the source of some of the biggest profits. Their number can be counted on one hand. Women lead or co-run funds focused on investing for social good at Blackstone, Carlyle, and TPG.

“We are focused on continuing to prioritize diversity in senior positions at TPG and addressing this industrywide problem that includes disparities in race and ethnicity, as well as sexual orientation,”

Anilu Vazquez-Ubarri, TPG’s global head of human resources, said in a statement.

Sandra Horbach oversees about $39 billion in buyout assets for Carlyle. Private equity is a relatively young industry, she says. It was started by men and attracted more men than women early on, but that’s gradually changing. “When you have women leading businesses successfully, as we do at Carlyle, that helps underscore the importance and benefits of diversity,” she says.

PE firms need to cast a wider net, says Heather Hammond, a senior member at recruiting firm Russell Reynolds Associates. She says she encourages firms to look beyond the usual banks and other buyout firms when hiring. For example, someone in corporate development at an acquisitive industrial conglomerate is likely to have skills a PE firm can use. “We have to push the boundaries,” she says.

Some women are breaking through another way.

“I felt like to really be able to run anything I needed to start my own firm,”

says Hollie Haynes, who founded buyout firm Luminate Capital Partners after working at Silver Lake Management LLC. “My memory of being a woman at these firms is it is really lonely.”

Author - Sabrina Willmer (Bloomberg)

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