Private equity sector in emerging markets massively male-dominated

01 April 2019 Consultancy.asia

China leads the way for gender balance in private equity according to research from global management consultancy Oliver Wyman, but at just fifteen percent of firms it’s a far cry from parity.

Senior private equity and venture capital professionals are by and large all male in both the emerging and developed markets according to a fresh study from global strategy and management consultancy Oliver Wyman, making up nearly 90 percent of the total mix. While China features the highest ratio of female senior decision-makers at 15 percent, that figure drops to 12 percent for the rest of East Asia and just 7 percent in South Asia.

These are just some of the figures revealed in the Oliver Wyman report ‘Moving Toward Gender Balance in Private Equity and Venture Capital’, which in association with the International Finance Corporation and investment firm RockCreek looked into the performance of gender balanced leadership teams – defined as those with at least 30 percent each of men and women – in the private equity and venture capital sector in emerging markets.Percent of Senior Investment Professionals Across Private Equity and Venture Capital who are FemaleAltogether, in respect to both private equity and venture capital firms, only 15 percent were determined to be gender-balanced at the upper-levels – well below the number of all-male-led investment teams which accounted for nearly 70 percent of the cases. As a further breakdown, 16 percent of the teams surveyed were all considered male-dominated, while there were no female-dominated teams noted in the study and just 1 percent found to be all-female-led.

Meanwhile, those receiving investments in emerging markets also tend to be men, with women led-businesses receiving only 8 percent of the deals and less than 10 percent of the investable capital – delivered in median sums which are at around 65 percent of that distributed to male-led businesses. These portfolio companies, also, were found to be mostly imbalanced, with lower than average rates of 20 percent.

“Women are significantly underrepresented as leaders in PE/VC firms, and their lack of representation means that the decision-making teams allocating capital in emerging markets are acutely imbalanced,” state the authors of the Oliver Wyman report. “Our research suggests that this imbalance may not only be reducing the returns of PE/VC firms, but could also be reducing female entrepreneurs’ equal access to capital.Percent of Capital Recipients who are Female by GeographyWomen, of course, remain under-represented in a range of roles across industries, and improving the level of representation has various normative benefits, such as creating stronger role models for future generations. For business, better representation can also have a number of benefits, from additional perspectives to improvements to the bottom line. And such is the case for the private equity sector, with the analysis finding that gender-balanced teams generate as much as 20 percent higher returns.

“Through our research, we have showcased the benefits of making gender balance an organisational priority,” the report concludes. “Moving the PE/VC industry toward gender balance will require action from both general and limited partners, and steps can be taken today by individual organisations interested in changing the male-dominated status quo. Actions taken today can help partners, women-owned and -led businesses, and the PE/VC industry as a whole reap the benefits of gender diversity.”


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