Private equity – A man's world?

Susannah Birkwood
20 October 2011

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The French venture capital association has just established a body to address gender inequality in private equity. But why do so few women still work in the industry? Susannah Birkwood finds out

You only need to attend a handful of conferences to see that women are in short supply in private equity. Indeed, the European Private Equity & Venture Capital Association's CFO-COO congress in June stood out for featuring an all-female panel. Most of the speakers though, such Pantheon's Amanda McCrystal and Stine Foss of Northzone Ventures, were in line with the industry's trend for women to cluster in the LP and venture spaces. Because while 9.1% of European senior PE executives are women, many of these avoid the buyout arena, with females accounting for just 6% of roles in this field globally.

Last month, AFIC, the French private equity trade body, launched AFIC avec Elle, a think-tank which aims to increase the number of women in fund management positions. No doubt it will look favourably on the Paris-based Women Equity Partners, which mainly invests in female-led growth companies, and backed the MBO of Lefebvre Software this week. Another initiative which could have an impact on women in PE and other areas of finance is the UK's 30% club. This organisation calls for 30% of FTSE 100 boards to be made up of women by 2015, something which could easily be emulated by PE-backed companies.

According to Anne Glover, CEO of Amadeus Capital Partners, the issue is not one of prejudice, but of women themselves choosing not to enter the industry. "Working in an aggressive deal-heavy environment with very long working hours and deals made via a lot of networking is just not conducive to a balanced life," she says. Among those that did choose private equity, several have triumphed at both the GP and fund-of-fund level (HarbourVest's Kathleen Bacon and Bramdean "superwoman" Nicola Horlick spring to mind), so it appears that success is there for the taking. Glover agrees: "If you want to be aggressive and ambitious, success is possible, but you have to want it and not everyone does." Sian Lloyd Jones, CEO of Finance Wales, concurs that the number of female applicants for jobs is low: "Recently we advertised for a portfolio director and had one female applicant out of 45. The interest we get for junior positions isn't much better." Unlike Glover though, Lloyd Jones believes that a subtle barrier exists which may be deterring women. "It's still too easy to assume that the man is the lead individual on a deal and that the woman's just there to take the notes or make the tea and coffee."

I don't know how she does it
If a lack of applicants is the main problem, it must be assumed that the buyout sphere commands the least applicants of all. The reason is all down to the unpredictability of the GP lifestyle, or so believes Carol Kennedy, a senior partner at Pantheon Ventures. "As a GP you often have to travel at the drop of a hat, especially if a deal is cross-border," she says. "Rather like in investment banking, when you're working on the deal side you don't know what you'll be doing from one week to the next." Women with partners or children thus often opt for LP roles because it gives them more ability to plan their work (and consequently their personal life) in advance, even though they may have to travel a lot.

Glover claims she chose the venture world over private equity on similar grounds. "Venture involves doing deals, but you're predicting the future and not trying to win a deal against competitors in a sort-of feeding frenzy," she points out. Being the head of a venture firm does require some sacrifices though; she doesn't have children and admits to devoting her career to the asset class. Could a woman have a family and do what Glover does? "Only if you're incredibly disciplined."

Another way for a woman to have greater control over her time is to establish her own fund manager. Such a move has the added benefits of side-stepping the fight to succeed in a male-dominated environment and potentially creating opportunities for other women. A further option for women is to lead their firm in spinning out, as Europe's "private equity queen" Dominique Senequier is currently doing with Axa Private Equity. According to Lloyd Jones, the right reasons for a spin-out are to establish a fund manager "which preaches freedom of thought and freedom of operation" if this doesn't exist under current ownership. Prominent founders include Karine Hirn of East Capital and Marleen Groen of Greenpark Capital, as well as Glover, who co-founded Amadeus in 1997. "I was a business angel originally, so by scaling up and raising a fund I could be more effective and have more impact," she recalls. "There's no way I would be able to do what I've been able to do without setting up my own firm."

Any barriers to entry into private equity could diminish over time as the assets women bring become more widely recognised. Though unquote's interviewees were reluctant to see themselves as "women in business", viewing themselves as professionals first and foremost, each was adamant that females bring a number of qualities not always displayed by their male counterparts. Women fund managers have superior judgment about people, they feel, the ability to communicate well and a willingness to work harder - "because they have to get to where they are". Nevertheless, according to Glover, the number of women dealmakers is unlikely to increase over time. "While HR departments will introduce more flexible working policies, they won't make a difference. The reason women won't choose PE in the future is for the same reason they don't choose it now - it's not a very attractive lifestyle."