1. Introduction
Diversity is not an end in itself. It is now widely accepted that the socialization of different points of view, held by women in particular, enriches discussions and decision-making processes.
Supported by the imposition of quotas, the presence of women on boards of directors of listed companies is now becoming significant in Continental Europe and also in the UK. At the same time, many initiatives are encouraging women’s access to key positions in companies and entrepreneurship, with diversity being taken into account in ESG criteria. Finally, for more than five years, a movement in favor of gender diversity in finance and in particular in investment funds has been taking place on a global scale.
In 2020, have these good intentions displayed on all fronts materialized in rality? How can we promote the emergence of this new generation of women who will know how to be wise investors, as well as shareholders of choice or successful leaders?
2. The place of women in 2020: some figures
Many institutional investors now refuse to subscribe to funds whose management teams are exclusively male. Under their direction in particular, the proportion of women in alternative management is growing, while remaining low: in three years it has gone from 17 to 19% of the workforce worldwide (according to the Preqin study of February 20201). In venture capital alone, the share of women rose to 21%.
In support functions (finance, legal, marketing, fundraising, operations, etc.) – there is a significant percentage of women. In these functions, lateral recruitments, outside the investment world, are also simpler. On the other hand, the number of women in investment decision roles remains marginal, and less than 9% of women hold general management positions in large firms that manage Private Equity, debt and real assets (real estate and infrastructure). Carlyle leads the way with almost 50% of the funds managed by women.
France Invest, the trade association for Private Equity organizations in France, flags that the percentage of women in investment teams has increased from 17% to 23%. France Invest commissioned a study published by Deloitte in 2020 on gender diversity in Private Equity involving 318 players in France2. While nearly a third of analysts and account managers are women, only 16% are Managing Directors and 18% Partners – because we include support functions. The same applies to the portfolio companies: women represent less than 30% of the workforce in executive bodies and less than 10% of CEOs or managers. Those numbers are in line with most European countries.
The problem is not only the recruitment of women, but also their retention. In order to be successful in build-ing a diverse team, the firms need to have recruitment and retention policies as well as KPIs to monitor the progress. The pace of work imposed in funds, such as in investment banking or strategy consulting, is not attractive to younger generations in search of meaning and personal balance. “There is a huge retention problem, since nothing has materially changed at the top… Firms ought to be asking themselves why” says Nori Gerardo Lietz, a senior lecturer at Harvard Business School. Statistically, women continue to censor themselves for these type of positions from junior levels. Recruiters are called upon, but for the recruitment of juniors with 3 to 5 years of experience in banking or consulting, men continue to represent 70 to 80% of the pool of candidates in an age group.
When there are two finalist candidates a man and a woman, it is often the man who is selected, more motivated and sometimes more ambitious, he will often come across as more convincing.
When it comes to access to boards of directors, there is a considerable difference between listed companies and others. Thanks to quotas imposed on listed companies in most countries in Continental Europe, the proportion of female directors now stands between 30 and 40%. In the boards of directors of unlisted companies, the figures are more difficult to access. Women would only represent less than 9% of directors. They are even less numerous in management positions.
Another indicator at half-mast is the access to capital for women entrepreneurs. In France, start-ups led by women have 30% less chance of raising funds than those led by men, according to a 2019 SISTA/BCG study. Only 2% of funds are raised by start-ups led by women, compared with 9% by mixed governance structures, and 89% by start-ups run exclusively by men.
3. Those who move the lines
While it will probably take another ten to fifteen years to achieve a better gender balance in investment funds, there are many drivers of change.
Firstly, there are those women who run major in-vestment players. Dominique Senequier, founder of Ardian or Virginie Morgon, CEO Eurazeo are inspiring “role models” and they promote the emergence of women in these funds where we find the greatest number of women at senior levels. Other examples are Sophie Van Oosterom, Head of Real Estate at Schroders, Sonali de Rycker a prominent Partner in FIG at Accel, Helen Steers a Partner at Pantheon. It is always easier to recruit women to work with other women: young people know that they will find a mentor in these pioneers who have made a place for themselves at the highest level.
There are also women who have taken the gamble of launching their own structure in this very masculine world of investment. It should be noted that they were often pioneers in their strategy, and strongly committed to promoting CSR investment criteria, including diversity. They are called Fanny Picard (Alter Equity), Nazo Moosa (Energy Impact Partners), Sitar Teli (Connect Ventures), Sasha Van de Water, (Keyhaven Capital).
Regular Publications such as Blomberg, PE news and other trade magazine list the most influential women in PE or in Finance, and it is comforting to see a list of 100!
In 2019, two Start-up founders, Céline Lazorthes and Tatiana Jama, supported by French business owners (Valentine de Lasteyrie, Nathalie Balla, Mercedes Erra, Anne Lalou, Françoise Mercadal-Delasalles, Stéphane Pallez) drafted a convention (www.wearesista.com) which has a dual objective, to be achieved by 2024: that more than 25% of start-ups financed be founded by women and that investment funds have 30% of women partners and 50% female teams. More than fifty funds are committed by signing this convention. At a time when the state shareholder demands that the only woman manager of the CAC40 be replaced by another woman, the private sector must be proactive.
We can praise the action of various networks in favour of women. The Level20 network in particular, founded in London in 2015, and which now has active chapters in all the major European capitals, is dedicated to in-spire and mentor female professionals in Private Equity and venture capital. After 5 years, the results speak for themselves, “95% of the people who have been men-tored are still in the industry and 87% have been pro-moted” announced Pam Jackson, CEO of Level20 at SuperReturn in September 2020. Level 20 funds re-search on gender diversity in Private Equity and above all organizes events to encourage women to pursue these professions. Likewise, Dominique Gaillard, Chairman of France Invest, is well aware of the impor-tance of diversity. He doesn’t just commission studies to measure how far we have yet to go. He also picked up the phone to call all recruiting firms working in this sector to urge applications from women, while refraining from going to poach women from other funds. It’s up to them to square the circle.
And performance in all of this? The emergence of women in investment and at the helm of growing companies is an asset for those who already practice this demand for diversity and should establish itself as a virtuous circle.
