There simply are too few women and people of color serving in lead investment roles across the industry. Diversity is a major topic of conversation in the private equity community, and many leaders think it is a long over-due, wakeup call to action. “A diversity of perspectives can help an investment team achieve superior returns,” said UTIMCO’s Mr. Hall. After years of having too few women or minorities in its ranks, PE is waking up to the need for greater diversity and the positive impact it can have on investment outcomes. Private Equity Metrics; Webinar; White Paper; Search. A study by the data analysis firm Preqin, for example, found that Our Story. “It’s easy to interview only the most obvious people from the same schools and pathways,” the Spencer Stuart report said. Based on Spencer Stuart’s experience working with firms to find and develop diverse talent, the firm identified several approaches private equity firms can take to increase diversity: There is an opportunity for the private equity community to connect with a more diverse talent pool, but it requires focus and effort — which only stem from a long-term commitment, the Spencer Stuart report says. “The science is the stats and the funnel, the piece everyone is talking about. I tell them that they will get better returns with more diverse points of view. Many LPs have already taken matters into their own hands. >Wnß7ÿög~Š¾šS[|@r¬?ÝG£t°îTӌF1œ¢;„hO¶níññÿ݇ùàìi>J@+à€µ2#ì©ë There simply are too few women and people of color serving in lead investment roles across the industry. Leverage our supply chain benchmarking program when building out your 2021 Supply Chain Strategic Plan . ЃÈîR.Hus2%А9rìÔá [KÉDl{ÊÆCÏ7ñ£5)ç5oA€bA,pÓ³~8Zò!‰¡„ú6ÊEÌ&ß¾ÃãwT;l€ßùèÂí»ðe°¦ò§à†Pb­r˜ –ïA¯0úö}ÜUëü´Ç0€O1Ä ;UÁ°¹ºÔ…TÎd–ã)µB ƒ ¹ÌZcÏ'7ß|¹O,0d¦˜EΤ&ïÂ)Edó ,8Ã×iÀ¦ô'¢8?¤ *Ø8Õä’/IBJˆC zW ÀGÇ ^sˆ×`ˆê}èÜøøˆ„ieDsxü@ô-T똈«°¶áà¯ÂWÉTÁ#¿ƒƒTS`h~ü.`ãb They haven’t taken the time to think about it in those terms. The University of Michigan’s Mr. Feder said that it’s obvious when firms are “just checking a box” as opposed to consistently embracing diversity for the right reasons. The plan also catalogues current data across the global organization and reports against metrics outlined in a ... KPMG International Limited is a private … e,ŸAlÄ;€X¡Š:ñ|². Private Equity vs Venture Capital Private Equity vs Venture Capital, Angel/Seed Investors Compare private equity vs venture capital vs angel and seed investors in terms of risk, stage of business, size & type of investment, metrics, management. Capital Commitment -Investors in a private equity fund commit to investing a specified … A variety of other studies, including separate ones by Deloitte and Stanford University, point to low racial and ethnic diversity in the private investment universe. That’s the piece no one seems to have cracked.”, “The diversity discussion carries on as institutional investors continue to seek out investment managers who will achieve the best results,” Ms. Burley Reid said. Building a Balanced and Diverse Workforce. Spencer Stuart’s interviews included: Dan Feder, managing director of investments, University of Michigan; Caroline Greer, managing director and chair of the diversity & inclusion office, Commonfund; Rich Hall, deputy chief investment officer, University of Texas/Texas A&M Investment Management Company; Eric Lang, senior managing director of external private markets, Teacher Retirement System of Texas; Michael Langdon, senior investment officer, Oregon State Treasury; Kim Lew, VP and chief investment officer, Carnegie Corporation of New York; and Kristin Mugford, senior lecturer at Harvard Business School. Gartner’s Hierarchy of Supply Chain Metrics Benchmarking will help supply chain leaders identify opportunities to improve end-to-end supply chain performance. In 2016, Hamilton Lane, a global private markets asset management firm with more than 28 years of experience, together with Bison, a cutting-edge software solutions firm, brought Cobalt to the market. Next-Gen Leaders: Advancing Women to the C-Suite, Sold Out! © Hunt Scanlon Media - Copyright 2021 All Rights Reserved. “The reality of it is, there is a science and art to effectuating change,” Mr. Langdon said. “But by casting a wider net from the start of your recruiting effort and digging a bit deeper, firms can engage a more robust and diverse talent pool.” These efforts can start early — at the graduate or undergraduate level — by collaborating with organizations devoted to embedding diversity in business, like SEO (Sponsors for Educational Opportunity) and Toigo. She also co-leads the firm’s global private wealth management practice. According to executive recruiters, DE&I should not just be a priority, but an integrated part of every company’s leadership goals. At the same time, research in recent years has highlighted the positive impact diversity can have on investment outcomes. That can help in the overall investment decision and deal process.”, Ms. Lew of Carnegie Corporation of New York said that when she talks with private equity firms, she always puts her concerns about diversity in business terms. Private Equity vs. Venture Capital Private Equity vs Venture Capital, Angel/Seed Investors Compare private equity vs venture capital vs angel and seed investors in terms of risk, stage of business, size & type of investment, metrics, management. The nation’s top executive recruiters are resetting expectations and looking for new ways forward to build balanced and diverse workforce teams for their clients. It also means flexible policies that balance the workload across the team as individuals go through different stages of life (new children, aging parents, etc.). “Hiring in the broader business and investment communities is already reflecting increased diversity in business schools,” said Ms. Burley Reid. “I will say, ‘It looks like you have all white males, and they all went to the same schools,’” she said. Enticing as the targets are, turning them into returns could be tough. “We expect teams to consider and spell out the concrete steps they are taking to show results.”, The Emerging Talent Population Can Support this Evolution. In 2012, TRS's board began a plan to strategically increase its allocations to private equity (PE). Ms. Burley Reid focuses on the recruiting of senior executives, investment professionals and sales, marketing, and client service leaders. “It is one of the best business decisions a company can make,” said Keri Gavin, a partner with Hanold Associates and leader of the search firm’s Global Diversity, Equity & Inclusion practice. “It stands to reason that private equity firms can become more diverse by moving beyond their traditional hiring approaches — expanding beyond hiring from the same set of business schools and the same “2+2” background (two years in investment banking at a major Wall Street firm and two years in private equity). This report will help organizations prioritize DE&I as a business imperative that drives greater competitiveness, innovation and business results. Candidates and LPs will figure out quickly whether a GP’s diversity efforts are genuine. Private Equity Recruiting: Linking Talent to Growth, Sold Out! Sarah Burley Reid is a senior member of Spencer Stuart’s financial services practice and specializes in executive searches within investment management and wealth management. Beneath the lack of racial and ethnic diversity is a similar lack of diversity in backgrounds — most have experience with the same Wall Street institutions followed by degrees from the same top-tier MBA programs. Audax Private Equity partners with management teams of established, market-leading companies who have the vision and desire to create much larger entities through acquisition and … “One investment professional might see a deal differently or might understand a different segment of the population. “There is rigidity in the system that is making it hard to open the aperture to get more people into the industry,” said Ms. Mugford, who was Bain Capital’s first female managing director. However, as one LP put it, “the talent pool is there to be recruited.” Though diversity on private equity investment teams remains low, the population of business school graduates is becoming more diverse. Almost all of the LPs that Spencer Stuart interviewed said that they pay attention to a GP’s level of diversity (or lack thereof). Driving Investment Returns Through Talent Management, 2021 Executive Recruiting ‘State of the Industry Report’ Series, 2020 Diversity, Equity & Inclusion Report, PE Report ‘Driving Investment Returns Through Talent Management’, Sold Out! 15 steps to fundraising a new VC or private equity fund. Spencer Stuart says to make sure your diversity hires know they work for people invested in keeping them and helping them thrive. “‘Are you concerned that you might be missing a point of view as demographics change? 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