Women still looking to gain ground in private equity

Many of the largest buyout firms, like Kohlberg Kravis Roberts & Co and the Blackstone Group, have taken steps to attract and retain women. But the overall industry still has plenty of work to do.

Some studies have shown that the number of women in senior positions has grown. However, no one knows if the number of women across the entire industry has grown, since no one keeps track.

Anecdotally speaking, several female executives, who declined to speak on the record, said the progress of women in private equity has stagnated. “I wouldn’t say it’s gotten worse, but I certainly wouldn’t say it’s gotten better,” said one GP who started her own firm.

“Women typically aren’t tapped as the ‘chosen few’ to stay on and rise within the firm,” another female executive said.

David Rubenstein, who co-founded The Carlyle Group in 1987, agrees more work needs to be done. “All brilliance is not in white males,” he quipped at the Columbia Business School PE + VC conference in February.

Rubenstein said the private equity industry has done a “reasonable job” in hiring women and minorities, but “not as good as it could do.”

The effort

To be sure, the top 1 percent of buyout shops is rallying to attract women. New York-based KKR increased paid maternity leave to four months from three as part of the Inclusion & Diversity Council it created in 2014. KKR has also implemented a childcare travel program where it picks up the tab anytime an executive, his or her child and nanny, need to travel, said Alisa Wood, a partner and member of the client and partner group.

When she joined KKR in 2003, Wood was one of the few women at the firm. “There are more women today in our business than we’ve ever seen before,” she said. “That’s an amazing thing.”

The Carlyle Group has a mentorship program within its U.S. Corporate Private Equity business that matches senior investment professionals with junior ones, spokesman Randall Whitestone said via email. The goal is to boost the number of senior women. Carlyle also has two Women’s Employee Resource Groups, in Washington and New York, Whitestone said.

Blackstone also goes to great lengths to attract women. It begins recruiting women in college during their sophomore year, said Joan Solotar, a Blackstone senior managing director and head of multi-asset investing and external relations. Blackstone hosts workshops on campuses as part of its Future Women Leaders program that targets candidates in their sophomore year. Blackstone uses the workshops to inform female applicants of the knowledge, training and skill they need for a career in finance or private equity, Solotar said.

“You have to get women at the college level,” Solotar said. “We teach women that this is an exciting and viable career.”

Still, getting a job at Blackstone is daunting for both women and men. Blackstone received more than 15,000 applications for 100 analyst positions, Bloomberg News reported in April 2015.

The Future Women Leaders program has succeeding in boosting the number of incoming women, a Blackstone spokeswoman said. More than a quarter, or 38 percent, of the 2016 analyst and associate class at Blackstone are women, up from 20 percent in 2014, the spokeswoman said.

The data

It’s unclear how many women are employed by the entire U.S. private equity industry. In 2015, North American firms had the second-highest proportion of women in senior roles at 13.7 percent, up from 11 percent in 2014, according to a report from Preqin. Asia had the highest proportion of women in senior roles with an average of 14.5 percent of high level roles held by women. Europe had 12.4 percent, Preqin said.

Here’s how the big firms stack up:

• Blackstone Group reportedly had the most women of all private equity firms, but that was before it spun off PJT Partners last year. The New York firm employs more than 2,000 people in 17 offices across the world, the firm’s website said. Blackstone did not disclose how many women it employs. However, 17 percent of women who work at the firm are in senior positions, including managing director and senior managing directors, a spokeswoman said.
• The Carlyle Group is the only firm that has disclosed the percentage of women it employs overall. Globally, Carlyle employs 1,700 people in 36 offices, according to its LinkedIn page. Of that total, about 40 percent are women, and 17 percent of the firm’s senior jobs are held by women, Whitestone said. Of the 17 percent, more than half, 55 percent, are in deal roles, he said.
• Kohlberg Kravis Roberts & Co had more than 1,300 employees, consultants and senior advisors as of September 30, according to its website. The total includes more than 345 investment professionals. KKR currently employs 39 women in senior roles, including directors and above. Of that number, 17 are women in senior deal-related roles (director and above), which include those in investment and capital raising efforts, a spokeswoman said.
• Bain Capital does not disclose how many women it employs. However, nearly one-fifth, or 17 percent, of the firm’s principal (or principal-equivalent) roles and above are held by women, a spokeswoman said. Overall, the firm had 950 employees as of last April.

Middle market

While the top buyout shops have made a concerted effort to attract and retain women, middle-market firms still have few women on staff and even fewer in senior positions. Because they are smaller, many middle-market firms lack the resources larger buyout firms have to recruit staff, sources said. Some firms do not even maternity leave policies because they’ve never had a female executive get pregnant, a recruiter said.

Middle-market firms are “little boutiques,” which requires candidates to “actively network” to get hired by them, one GP said. “It’s a little bit of a clubby industry that hasn’t been easy for women to tap into,” the GP said.

A few firms stand out because of their diversity:

• Vista Equity Partners has many women in senior positions, a source said. A scan of Vista’s website revealed the following female executives: Kristine Jurczyk, co-head of Vista Credit Opportunities; Betty Hung, principal; Renee Yang, deal vice president; Gwen Reinke, chief compliance officer; and Christina Lema, general counsel. While Vista employs thousands through its portfolio companies, it’s unclear how big the firm is. Its LinkedIn page says the firm falls in the “51-200 employees” range. Vista has three offices in Austin, Chicago and San Francisco.
• TSG Consumer Partners has 38 employees, of which 24 are women. Three of the firm’s seven deal-making partners are women.
• Berkshire Partners counts five women among its 24 partners, said Managing Director Kevin Callaghan via email. Berkshire named its first female partner back in 1993, Callaghan said. Women, he said, play important roles across the firm. “As a result, we think our culture is greatly enhanced and our decision-making more effective,” he said.

Building community

Women in private equity are finding ways to help themselves advance. Several organizations have emerged for women in private equity and finance, including the Women’s Association of Venture and Equity (WAVE), the Private Equity Women Investor Network, the NY Private Equity Network, the Financial Women’s Association, Ellevate and High Water Women.

These organizations help women network with their peers and allow younger women to meet with more experienced professionals for advice and recommendations.

“The memberships have grown,” said Andrea Kramer, managing director at Hamilton Lane. “[Membership in these groups] is important … Being able to see the numbers and meet with people, it gives you a broader perspective. There are a lot of senior women in this business and it helps to affirm we are making progress.”

Forty-one percent of Hamilton Lane’s workforce is female, and women comprise 28 percent of all senior leadership roles (VP and above) at the firm.

“By virtue of diversity and backgrounds and doing this around the world, we make better decisions, and we have more thoughtful and constructive perspectives,” Kramer said. “I definitely see that things are trending favorably.”

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