Employee diversity is, and will continue to be, a “hot issue” in private equity, said Karen McCormick, CIO at venture capital firm Beringea. Speaking at the BVCA Summit in London, she stated that there is growing market demand from LPs for diversity across the industry.
While diversity of intake is improving, the key issue lies in retaining staff up to senior levels. According to McCormick, there would have to be a retention rate of at least 50 percent of new hires in order to hit the industry target of a 30 percent female workforce. According to data published by Preqin earlier this year, only 18 percent of private equity professionals are women, with that figure decreasing to below 10 percent at senior level.
The figures for female diversity within private equity still leave a lot to be desired, said McCormick, but the rate of inclusion for other minority groups is “far more abysmal.”
A report by the Knight Foundation found that private equity firms with at least 25 percent racial/ethnic minority-held ownership made up just 3.8 percent of the industry.