You’ve been doing it wrong

A seismic shift in attitude is needed to redress the gender imbalance in the private fund industry.

‘It is just the way it is.’

This was the explanation offered by the managing partner of a very successful private equity firm for why his firm’s senior investment professionals were 90 percent male. I’m paraphrasing, but that was the sentiment.

The context: pfm was privy to a dinner-table conversation between that managing partner – who had more than 30 years of investing behind him – and a much younger female entrepreneur, now on her second business with VC backing and a string of other accolades to her name.

While the conversation was cordial, both parties were clearly frustrated. The former at being challenged by someone with much less business experience under her belt; the latter by being offered explanations that, while well-meaning, were rooted in the sort of biases that contribute to the gender imbalance in the upper echelons of the private funds industry.

One example: the managing partner cited the “airport test” as a decisive factor in a recent senior appointment. With two qualified candidates in the running – a woman and a man – he fell back on the “airport test.” Which of these candidates would I be happy to spend six hours in an airport with if our flight gets delayed? It may depress but not surprise you that the man got the job.

“We have female admin staff without whom the business would not function,” was another observation proffered. True as this may have been, it missed the point.

The conversation was revealing, with one lesson being that if you have operated successfully within a certain social framework for your entire career, it can be very difficult – galling even – to be told you have been doing it wrong.

But it is the existing social framework that has spawned an imbalanced industry. Women accounted for just 5 percent of senior positions in the European private equity industry in 2015, according to Level 20, a group established to redress that balance.

It is this social framework that permitted the existence of The President’s Club (and, I’m sure, similar gatherings around the world). The scandal around the male-only charity event sent ripples through the world of private funds in January. Real estate investors were closest to this particular fire, but managers in all asset classes should take note.

I’m not putting forward any solutions here, I realise. If you are looking for these, I would recommend a visit to as a starting point.

One of the most significant challenges in ensuring greater gender diversity in the private fund industry will be this: persuading those who have successfully built franchises that, with the greatest respect, they have been doing it wrong.

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