The lack of female executives has long been an issue in the private equity industry, but new research from PitchBook indicates that newer US firms are not necessarily making efforts to rectify this balance.
Overall, the percentage of women in upper level professional roles at private equity firms is 8.8 percent, according to the survey. That ratio increases at firms founded from 1970 to 1979 (where 12.8 percent of top level roles are occupied by women) and in firms founded from 1980 to 1989, in which 10.4 percent of high-ranking positions are held by women. For firms founded after 1990, however, the percentage of female execs drops off into the 8 percent and 9 percent range.
Gender diversity also differs depending on the size of the firm, according to PitchBook. In firms with $10 billion to $25 billion or more in assets under management (AUM), 11 percent to 12 percent of top spots are held by women. Only 7.6 percent to 8.3 percent of top roles are held by female execs at firms with less than $10 billion in AUM.
“Maybe this is due to the fact that big-name players are able to make the best offers to the pool of qualified female candidates and outbid smaller firms,” the PitchBook report noted. “Or maybe scrutiny from LPs, media and the general public is contributing to hiring practices of the well-known names in the private equity limelight.”
European data shows similar trends by firm age, with older firms proving more balance. However, the largest European firms recorded the lowest percentage of female top-level executives in the survey with 8.1 percent.
According to a February study published by researchers at Wake Forest University and University of North Carolina, Wilmington, firms would be wise to include more female members in senior positions, as gender may play an important role in preventing corporate tax evasion. The study conducted 4,674 observations of firms from 1991 to 2011, including 309 observations in the finance, insurance and real estate sector. Results show that female CFOs are less likely to evade taxes than their male counterparts.