EMPEA launches working group to accelerate gender parity in the global private capital industry
LeapFrog, International Finance Corporation and Cartica Management LLC will be part of the association’s first industry initiative aimed at addressing the gender gap in emerging market private equity
We know our industry wields a lever long enough to move the world: the US$2.5 trillion of total assets held by global PE funds. We need a concerted effort and plan to put more women and more gender awareness behind these financial instruments of immense power. Furthermore, we need to deliver outsize returns to our investors and the data is beginning to show the correlation between diversity in teams and performance, as well as the largely untapped potential of female-owned businesses.”
Washington D.C. 18 May 2018:
EMPEA, the global industry association for private capital in emerging markets, has today announced the formation of the association’s first industry initiative aimed at addressing the gender gap in emerging market private equity: the EMPEA Gender Parity Acceleration Working Group. The Working Group was launched at the IFC’s 20th Anniversary Global Private Equity Conference in association with EMPEA convening almost 900 investors from across the globe this week in Washington. A key barrier that remains in the industry is the lack of gender parity. Women remain heavily underrepresented, while studies indicate that financial performance of companies is correlated to diversity.
The EMPEA Gender Parity Acceleration Working Group will leverage the convening power of the organization’s 300 member firms, including both general partners and limited partners, who invest in more than 130 countries worldwide and represent over US$5 trillion in assets. Leaders from EMPEA member firms International Finance Corporation (IFC), Cartica Management, LLC, and LeapFrog Investments called for action in this conference’s milestone year to address key diversity issues that continue to challenge the industry and to identify next steps to achieve gender parity.
According to Preqin’s October 2017 Women in Alternative Assets Report, women represent just 18% of all employees at private equity firms, and hold less than 10% of all senior positions. Across alternatives, the total number of women in the private equity sector, as well as women holding mid and senior roles represent the lowest of the asset class. At the Global Private Equity Conference’s 20th anniversary, industry practitioners recognized the need to continue to evolve and transform traditional models to find new ways to spur innovation, create impact and increase returns.
In a poll conducted by IFC and EMPEA, the majority of respondents indicated their firms were actively undertaking initiatives to address gender equality. However, there was an overwhelming concern over the low number of women in both leadership roles in portfolio companies and the investment pipeline. The gender parity issue at the leadership level was further compounded by the widely held belief that structural aspects of the investment sourcing and diligence process disadvantaged senior women.
Heather M. Kipnis, Gender Secretariat – Entrepreneurship Lead, IFC: “The global private capital industry plays a critical role in enterprise growth, job creation, innovation, and financial security and can play a catalytic role in closing economic participation gaps between men and women.”
Shruti Chandrasekhar, Senior Investment Officer, IFC Venture Capital noted: “In 2017, over 1800 emerging market companies raised funding of which only around 300 had a female founder or co-founder. Do we think that 49% of the population is only capable of producing 300 fundable companies? Or, are we missing out on untapped financial and social opportunity that we need to address?”
Teresa Barger, Co-Founder and CEO, Cartica Management LLC, and Board of Directors Vice-Chair, EMPEA said: “There is now data to support that having more women in decision-marking positions leads to higher returns. A Credit Suisse 2016 report shows that companies with over 50% female senior leaders outperformed the overall market by a CAGR of 10.3%, demonstrating the clear benefit of parity.”
Andy Kuper, Founder & CEO, LeapFrog Investments and Board Member, EMPEA commented: “We know our industry wields a lever long enough to move the world: the US$2.5 trillion of total assets held by global PE funds. We need a concerted effort and plan to put more women and more gender awareness behind these financial instruments of immense power. Furthermore, we need to deliver outsize returns to our investors and the data is beginning to show the correlation between diversity in teams and performance, as well as the largely untapped potential of female-owned businesses.”
EMPEA will lead a collaboration effort across the emerging market private equity industry to address the issue of gender parity, develop the data and case studies, and engage members in an action-oriented plan to address inequality. Members interested in joining the Working Group on Gender Parity should contact EMPEA.