Like many other employment sectors in the UK, private equity roles have historically seen an earnings imbalance between genders.
Many of the contributing factors are highlighted in a report titled: Moving Toward Gender Balance in Private Equity and Venture Capital. Published in 2019 by the International Finance Corporation, the document addresses issues including the relative lack of women in the industry.
One of the less surprising findings of the report is that women are outnumbered in senior positions in private equity firms, particularly at senior level.
But what many may not realise is that better gender diversity doesn’t just benefit corporate culture, it also boosts the bottom line.
Several studies and independent audits in various countries have indicated that private equity transactions completed by all-male teams generate lower returns.
According to the report, firms where women comprise at least 30 percent of the investment decision-making team achieved up to 20 percent higher ROI.
But despite this, the gender imbalance has endured for decades, probably due to a combination of several reasons.
The number of female business and economic graduates is (and has always been) lower than males.
And private equity’s ‘reputation’ as a boy’s club or macho bearpit can often put talented women off even entering the sector.
The relative lack of role models to emulate at senior level likely contributes to the lower intake as well.
Traditionally, the longer and unsociable hours have been seen as something men are more likely to accept as ‘part of the job’.
Environments that effectively force women to choose between a career and family can discourage them from progressing to senior positions.
Often younger women that enter the profession after graduating can feel compelled to leave private equity in order to achieve a satisfactory work-life balance.
The bigger picture
The overall image created by the study (and others like it) is one of a sector with work to do to address gender inequality in areas beyond just salaries.
Firms need to work to address diversity in areas such as management structure, work/life balance, career progression and especially recruitment.
The organisations already taking these steps are more likely to reap the benefits in future both from a cultural point-of-view as well as a financial one.
Want to learn more?
If you’re interested in securing a private equity position that offers fair remuneration for your efforts, we can help. We have a proven track record of successfully placing candidates of all genders with progressive organisations.
To talk to an experienced consultant about your next career move or registering with our executive network to find out about relevant roles, contact us today.