Breaking into the boys’ club

As part of private equity may be primed for disruption – and it’s one that’s overdue. This spring, the World Economic Forum issued a white paper to identify the negative impact of a male-dominated workforce on the asset class and to outline practical ways to redress this problem.

The paper calls on LPs to spearhead a cultural shift to rectify the colossal gender imbalance and push more women to the forefront of the industry. According to panellists at a seminar in London recently, this shift shouldn’t be too hard to effect.

Contrary to the commonly-held perception of private funds as a “boys’ club” where women have scant chance of making it to the top because of ingrained bias, speakers at the seminar Women in Investment Funds: A Fundamental Advantage?, organized by lawyers Cadwalader, Wickersham and Taft, argued that private funds’ flat structures and entrepreneurial culture make it ripe for this kind of shake-up.

“It’s less of an old boys’ club in the way that ‘we only take people who come out of these schools.’ I think to some extent funds tend to be more meritocratic, and if you prove yourself you can rise,” said Karen McMaster, a partner in Cadwalader’s financial restructuring group, speaking at the event which was part of the firm’s Women in the City program.

Fellow restructuring group partner Ingrid Bagby added: “For the most part, it’s still a relatively young industry; funds are structured to be nimble. Many of them are focused on one or two personalities, so it doesn’t take much to effectuate change. You’ve got basically two or three incredibly powerful people that you need to influence and then you know you can get something done.”

Level 20, a non-profit group aiming to inspire women to join and succeed in the private equity industry, estimates that just 5 percent of senior roles in the European private equity industry are held by women.

Getting more at the top requires a two-pronged approach: attracting more female applicants for junior roles, and curbing attrition at the middle and senior levels.
Cadwalader is working on initiatives to address both. It recently launched a formal sponsorship program that pairs pre-partner lawyers with the most powerful partners in the firm who, more often than not, are male.

“These women are afforded assignments and high-profile opportunities by their sponsor, which gives them greater visibility and opportunity for being viewed as eligible for promotion,” Bagby said.

The pipeline issue has to some extent been addressed in the legal industry; roughly half of law school students in the US are women. For private investment funds, which rarely hire straight from graduate school, there’s still a tremendous amount of work to be done.

Cadwalader is looking into ways to reach high school students and get them thinking about financial services as an approachable, rewarding and – most importantly – achievable career path.

The private funds industry would do well to consider taking such measures.