A trillion dollar industry with a diversity problem

According to a McKinsey study, women make up only a small fraction of leadership in Private Equity firms; they account for 12% of managing directors and 16% of principals and partners in investment roles. Less than 1 in 10 on Investment Committees are women and the number drops to a staggering 1 in 100 for women of color. While over 33% of entry level investment positions are women, PE continues to be a male-dominated field.

This 10 trillion-dollar industry has yet to make considerable progress in DEI programs. If more women were to hold higher roles, companies would enjoy more transformational opportunities such as higher returns on investments/assets, reduction in bid premiums on mergers & acquisitions, and the ability to allocate assets more efficiently. Some studies even show that companies with women on the board are more socially responsible (might want to add a study reference). Companies that are diverse in gender and race have a better chance of landing business that serves women and minoritized groups. In fact, according to Morgan Stanley’s calculations, missed opportunities come in at a whopping $4.4 trillion.

PE firms will benefit from fixing their diversity equation if they want to do well over in the coming years. Is your company looking to increase its diverse talent? Connect with any one of our Practice Leaders.

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