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Blog For De&I

The Private Equity Industry has made strides in diversity, but this progress is slow-moving. While many people see the value in diversity and inclusion, there are still problems with how inclusive the industry is.

According to a CNBC report, "women make up 2% of private equity partners. Meanwhile, 90% of senior investment teams are all white."

This number is astonishingly low compared to other industries with higher female representation. Industries such as finance and accounting have an average of 20% female representation, which demonstrates that there are ways to improve diversity in private equity.

Another minority demographic, and one that is even less represented than women, are people of colour. According to industry reports, just over 3% of senior roles at LPs were held by people of colour. This lack of representation becomes a problem when the industry looks to promote diversity and inclusion initiatives. How can the efforts be successful if there is no one to represent these groups?

Even though many barriers are being broken down, several problems still exist for women and minorities seeking employment in private equity.

"Among firms with multiple funds, only 22% have more than one female partner."

This statistic alone shows how far behind other private equity industries are.

Industry Initiatives:

The Private Equity industry has been striving towards a more diverse and inclusive workplace for years. In recent years, organisations have put several initiatives in place, such as the Institutional Limited Partners Association (ILPA). In 2016, ILPA updated their diversity initiative to provide a more detailed and actionable plan for promoting a culture of inclusivity within the industry. This updated diversity initiative includes a Diversity Survey, which can be found here:

Some initiatives highlight women who have succeeded in the private equity industry. Backed by GPs, limited partners and large corporations, these programs seek to show that gender diversity has positive effects for both men and women.

In addition, many private equity firms have created initiatives to promote workplace diversity. In 2015, Stepstone Group launched the Stepstone Women’s Initiative Network (SWIN), a collaborative effort to increase gender diversity within the industry. 

In Europe, diversity groups such as Level 20, PEWIN, The Diversity Project and 1,000 black interns continue to empower the narrative, research and enablement of greater diversity. 

The Pipeline Problem:

The issue of diversity in the private equity industry is often referred to as a pipeline problem.

Many feel that women and minorities are not entering the workforce at the same rate as their white male counterparts, which could be because there are barriers that must first be broken down by those who seek entry into these prestigious positions.

"A large barrier to entry is the lack of women and minority students in undergraduate and graduate private equity programs."

Another part of the pipeline problem is the need for more support from organizations seeking a diverse workforce. According to Catalyst, "75% of women managers felt they were not sufficiently prepared or trained for their current roles."

This lack of support often discourages women and minorities from seeking employment in the private equity industry.

The pipeline problem is compounded by the fact that most individuals believe they need to be qualified to apply for senior positions in their respective fields. According to a Stepstone study, only 29% of Millennials feel prepared to apply for a job at their desired level without gaining additional experience. This leaves those who already feel unqualified even more unlikely to pursue senior positions in the private equity industry.

Hiring Diverse Talent:

When it comes to hiring diverse talent, there are many factors that must be considered. When assessing whether or not an individual is a good fit for the position, employers will usually consider several characteristics, such as educational background and salary requirements. However, when it comes to diverse hiring practices, one of the most important things companies should look at is the individual's cultural background.

A Boston Consulting Group study found that employees from similar social backgrounds are less likely to embrace diversity in the workplace. This has led companies to hire individuals who have not only gone through the same educational paths but also those with similar cultural backgrounds.

This can be a limiting factor for individuals who wish to pursue senior positions in the private equity industry.

In addition, many companies have put specific requirements on their job applicants that can prove challenging for women and minorities to achieve. For example, some employers require recommendations from specific individuals to hire a candidate. This requirement poses a problem for women looking to enter the private equity industry as they often need mentors willing to vouch for their abilities.

The Solution:

Companies must do more to promote diversity within the private equity industry. Companies must re-evaluate their hiring criteria for potential employees. For example, recommendations should be optional for hiring diverse talent. This is because many women who apply for senior positions in the private equity industry have yet to have the networking advantages that their male counterparts have.

Companies should also consider an individual's cultural background when assessing whether they are qualified for a senior position. For example, if two people applied for a senior role in an investment firm, but one came from a different socialisation background, this should be offered as a factor when considering whom to hire. Understanding diverse backgrounds and experiences are essential because it allows companies to understand how individuals interact within the workplace.

Achieving Inclusion:

While many of these efforts have come a long way in creating greater diversity within the private equity industry, it still has much to do to achieve true inclusion.

For diversity and inclusion initiatives to be effective, there must be a conscious effort from both employees and employers that will allow them to "raise awareness of unconscious biases relevant to the workplace." When it comes to private equity firms, this means hiring diverse individuals and ensuring that they're treated equally in the workplace.

Inclusion also requires a commitment from both parties to develop a workforce which is representative of the talent available in the market. According to an article by SAP, "increasingly diverse workforces require organizations to rethink their talent acquisition models, as well as how they use and deploy this talent."

This can be done through several methods. Examples include "investing in training and development, ensuring that talent is spread throughout the organization, rather than concentrated at the top."

The greater diversity of opinions and thought processes can lead to an increase in innovation — the more shared perspectives, the greater the chance for success in any project.

​If you are seeking advice on enabling better hiring practices within your organisation or training in interview best practices, contact us at

​About Altus Partners

Altus Partners stands for quality and integrity and is committed to empowering growth within global private equity. We provide Executive Search & Advisory for Investment, M&A and Finance leadership.

We strive to change the private equity sector by promoting diversity and equality. Our mission is to challenge the status quo and create a more open, inclusive industry where everyone has an equal opportunity to succeed. We believe that together, we can make this happen.

We do this by being committed to delivering the highest quality outcomes for our clients and candidates. Our specialist methodology and industry expertise have enabled us to become leaders in our field and strive to provide the best in every aspect of our work. We are proud to have built a reputation for excellence that sets us apart from the competition.