Regions

The lack of female roles in private equity underscores the industry's weakness - report

December 7
2:58 AM 2013

Stephanie Marton's article published on Forbes newsmagazine raises the question on the lack of female leaders in the private equity industry. In her article, Marton said the general consensus of commentaries pointed to two solutions in order to fill the need of female power players in the industry. The culture should adopt in order to accomodate female players, or that females who wish to enter into the private equity business need to lean in or adopt themselves to the roles they wish to fulfill, the article read.

Marton pointed to the study cited by the New York Times' The DealBook, which revealed that less than 10% of the senior private equity executives are female, which leads to private equity's Achilles heel that even private equity leaders had acknowledged.

Operational value, said Marton, is the key to the success of a private equity firm with deals in recent times. An INSEAD/Wharton collaborative study revealed that improvement to operations could deliver over half of the deal value in total, which was one-third of an increase in value a decade ago. Because of this, huge funds including major firms Bain Cap and KKR, followed close behind by TPG, had been busy building operations houses in order to capitalize on the need to supplement the company value.

Marton said, referring to the two traditional options above, said the two options needed not to be carried out by either parties, and said the evolution of the business model of private equity provides a natural solution to address this need. Women, said Marton, could be ushered into operational roles to fill the need lacked in a men-dominated private equity and in order for firms to be successful in deals.

Marton wrote, "If history holds, this trend has the potential to catalyze women's participation in the industry. For many reasons, women tend to gravitate to operational roles more than to the transaction teams. The talent pipelines that supply in-house ops teams all typically hail from consulting houses and large companies, both of which are populated with more women than the investment banking feeders that supply the deal side."

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