In Her Own Words
We spoke with leading women executives from 2018 Top 50 PE Firms in the Middle Market to learn what’s changed for women in PE, the advantages and/ or disadvantages of being a woman in the industry, and their paths that led to sucessful PE careers.
Included in the interview:
Megan Horvath, Partner, Resilience Capital Partners
Gretchen Perkins, Partner, Huron Capital Partners
Beth Rahn, Vice President, McNally Capital
Helen Steers, Partner, Pantheon
Here’s what they had to say:
Susan: There are more women in PE now than ever before, although the numbers are still low. What has changed that you’ve seen over the years for women in PE?
Helen: Although I think it is generally acknowledged that we have some way yet to go, the fact is that more women are working in financial services than there were when my cohort embarked on our careers. So, young women have more role models they can look to. There are many networks, support groups and opportunities for young women to tap into these days, including Level 20 in the UK.
Clearly the data shows that private equity has much progress to make still, so young women are going to have different experiences depending on which firm they work for. That’s inevitable. But the main thing I would single out that has changed is that there is recognition now that diversity and inclusion matter, and that they make good business sense. If you look at the most recent McKinsey report, “Delivering through Diversity”, published in January this year, the statistics show this starkly. Factors that affect companies’ bottom line tend to gain the attention of Boards of Directors, so studies such as this one are contributing in an important way to progressing from recognition by firms that they need to improve, to actionable initiatives to achieve improvement. But you are right, private equity is on the right track – last year’s “Counting Every Woman” study by New Financial showed our industry had doubled female representation on executive committees between 2014 and 2016, albeit to a still unacceptably low 10% compared with 27% for the asset management industry more broadly.
Megan: Many things have changed for women since I joined Resilience Capital Partners in 2007. The number of women in the House of Representatives grew to 104 from 85; the number of female U.S. Senators increased to 22 from 16; and a major party nominated a woman as its presidential candidate. The number of women in private equity also has seen growth, with 12.6 percent of women holding senior jobs at private equity firms, according to a Preqin study from 2016.
Women are still far from parity, but the trends have been positive. If these trends are going to remain positive, we – women and men in private equity – are going to have to make a commitment to expand opportunity. There are more ways to do so than ever; while the number of women in private equity may be relatively small, the activities and support for them are increasing rapidly, including the proliferation of women-focused networking groups and conferences for female professionals in private equity.
Among the more prominent groups are the Private Equity Women Investor Network, the Private Equity Women’s Initiative and the Women’s Association of Venture and Equity. Events gaining visibility include the Women’s Private Equity Summit and the Women in Private Equity Forum. I attended the Women of Leadership Summit in New York City in January, hosted by the Association for Corporate Growth’s New York chapter. It was a day full of roundtables, panels and an inspiring keynote speaker, and I and every woman I know who attended came away motivated to increase the numbers of women in private equity.
Beth: Women in finance generally, and certainly in private equity, have built an incredibly strong community over the years, and the level of collegiality and collaboration amongst women in finance has grown significantly. Because historically, women have represented a lower proportion of the finance community, women have banded together to collaborate and support each other. We’re at a tipping point where the finance community and the private equity community are feeling increasingly less male dominated, and women are increasingly moving into private equity and building longer term careers in this industry.
There’s also a generational trend at play in that people are getting married later than ever, people are having children later than ever, and that allows for greater flexibility to progress in more demanding career paths, like private equity. That’s a very relevant dynamic that will continue to support the increase of women in PE over the next several years, probably several decades.
Gretchen: Our ranks are still low. I think our numbers are still about 10%. It was 10% when I started my career and I would guess it’s still about 10% now. Despite that static percentage, I think there are a couple things that have changed over time for women in PE.
Women entering PE today can see women who hold senior positions in firms, which was quite rare for my generation. There are women they can look up to as examples of career progression and success; folks who can demonstrate that you can have a family and succeed in this industry. I think the perception that doing so is extremely difficult has been a pain point in our industry, and it has kept women from choosing our industry early in their careers or has caused them to drop out after having kids. I’m encouraged to see that there’s a number of us in senior management positions that younger women can see, speak with, network with and benchmark, hopefully making our industry seem more approachable for them. I think that’s different in a positive way.
Another thing keeping the numbers low in this industry in my opinion, is quite simple. The intelligent, ambitious, aggressive young women that we seek have many more options today. I believe there’s a much greater inclination to become entrepreneurs and create their own career path. So many things today enable that, from entrepreneurship and empowerment grants, to crowd funding, and social media enabling market access and customer engagement, just to name a few. In many cases there are far fewer roadblocks to starting a business and creating your own destiny (and maybe sell to a private equity firm down the road!).
Megan: There are numerous formal and informal local groups that facilitate collaboration and idea sharing. Women joining the industry today can tap into networks immediately and get up to speed quickly. Personally, I am very active in the Cleveland business community – I am on the board of the local chapter of the Association for Corporate Growth and a member of the executive committee of its Women in Transactions subsidiary. I have been more actively reaching out to my networks and encouraging women to consider new opportunities. These opportunities are available at firms of all sizes. The larger private equity firms have a significant number of jobs at entry, middle and senior levels. In addition, while small and mid-size firms such as mine have fewer opportunities available, they are great places for women to learn and expand their horizons because you get senior level attention more easily and you can gain responsibility much sooner.
Gretchen: It is a difficult career path, no doubt. However, it is incredibly rewarding, because it’s challenging and you’re working with really motivated, energized, and intelligent people and everybody loves working in that sort of environment.
The limited partner industry is helping create change by asking questions about diversity at your firm, diversity throughout the management of your portfolio companies and what sort of programs and policies you have in place to build diversity. When the LP’s, who are the source of funding for private equity firms, start asking those questions, private equity firms are paying more attention to it. To my knowledge, LP’s rarely, if ever, asked that question ten years ago. It typically came up as part of your ES&G criteria (Environmental, Social and Governance).