More women in private equity than ever considering starting their own firm

female founder leaning on her desk with computer, private equity, entrepreneur

More women in private equity than ever are considering starting their own firm, according to new research.

The GP Trends report, conducted by Investec, found that 22 per cent of women claimed they would start their own private equity business if they left their current firm. This is compared to zero per cent in 2020 and just two per cent in 2018.

According to the findings, the pandemic has revealed a radical shift in sentiment among female general partners in private equity, who are now showing increased levels of satisfaction with their careers and newfound ambitions to start their own private equity practices.

21 per cent of women report being much more satisfied with their career, compared to 19 per cent of men. This compares to 21 per cent of women who previously said they were less satisfied in 2020. However, male career satisfaction continues to be higher, overall, with cumulative data highlighting that over half  are at least somewhat more satisfied with the direction of their career, compared to 42 per cent of women.

22%

would start their own private equity business

22%

would start their own private equity business

21%

of women are more satisfied in their career

21%

of women are more satisfied in their career

However, while lockdown has given women in private equity time to reflect upon their career opportunities, gender pay inequality still remains a core concern.

Despite a positive shift in overall sentiment from women in private equity, general partners still express concerns around gender pay equality. 69 per cent of respondents still believe they would be paid more for their job if they were male – up from 56 per cent in last years’ survey. The figures increase to 86 per cent among the small number of BAME female respondents surveyed. This is despite almost three-quarters of women surveyed agreeing that their firm considers diversity and equal opportunities to be key in building a successful business.

Ethnicity pay equality was also identified among respondents as a cause for concern, as 34 per cent of BAME respondents believe that they would be paid better if they were white. While just 18 per cent of those at Partner level agreed with this, 45 per cent of those at Managing Partner level or equivalent and 44 per cent of those in roles below partner level see their ethnicity as a contributing factor to their pay.

69%

believed they would be paid more if they were male

69%

believed they would be paid more if they were male

34%

of BAME respondents believe that they would be paid better if they were white

34%

of BAME respondents believe that they would be paid better if they were white

Speaking about the findings, Investec’s Helen Lucas said, “Everyone who starts their own firm does so for their own reasons and these reasons will often be deeply personal.”

“But this increase in the number of women looking to found their own GP is encouraging on two fronts.”

“Firstly, it identifies the industry as one where a female entrepreneur feels that they can be successful.”

“Secondly, it starts to redress the gender imbalance at the top of private equity firms.”

“It’s encouraging to see that sentiment has improved among female partners despite a challenging 2020 with the pandemic.”

“The fact that there are significantly more female partners wanting to start their own private equity practice is an exciting shift for the industry, and I hope this means we will begin to see more inspiring female-led firms.”

However, while there have been steady improvements in some areas, it is clear that pay equality is still an area of significant concern from both a gender and ethnicity perspective.”

“It is understandable that change isn’t something that will happen overnight in such an established industry, but it is worrying to think that partners believe their career prospects would be better if they were a different gender or race.”

“Having transparency around the gender pay gap is still an important way to help tackle this challenge, but true change will come from building a more diverse leadership in the private equity industry, overall”

About the author

Alison is the Digital Content Editor for WeAreTheCity. She has a BA Honours degree in Journalism and History from the University of Portsmouth. She has previously worked in the marketing sector and in a copywriting role. Alison’s other passions and hobbies include writing, blogging and travelling.

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