3 questions to smart minds

A Diversity Award for the Private Equity Industry?

For this 3 questions to Dr. Thomas A. Jesch

Co-initia­tors of the “PE Diver­sity Awards 2020”
Photo: Dr. Thomas A. Jesch
27. March 2020

In recent years, more and more German private equity firms have been looking to bring more women into their teams. Compared to the broad finan­cial indus­try, howe­ver, the equity sector appears to be far behind in terms of equa­lity. In the US, it is about 9 percent in senior posi­ti­ons (source: Preqin), and in the gene­ral finan­cial sector as much as 18 percent (source: McKin­sey & Company). What are the reasons for this?

For this 3 ques­ti­ons to Dr. Thomas A. Jesch, Mana­ging Direc­tor bii Bund Insti­tu­tio­nal Inves­tors e.V. and one of the initia­tors of the “PE Diver­sity Awards 2020”

1. Accor­ding to a study by the HEC, the number of female deal leaders in the US and Europe has been found to be less than one percent. What are the reasons why the figu­res are so bad?

There are a lot of them. Histo­ri­cally, certainly, the tradi­tio­nal role model that at the very begin­ning kept women from any career. Even when there were initial impro­ve­ments in gene­ral, the male-domi­na­ted finan­cial indus­try contin­ued to lag behind. “Finance is not for women — focus on HR posi­ti­ons.” Brave women have igno­red this nonsense and fought their way through it. But the mathe­ma­ti­cal problem conti­nues: the top women in finance, and espe­ci­ally private equity – still too few in numbers – do not want to make the same mistake and promote exclu­si­vely female mentées.

So ever­y­thing is procee­ding very slowly. And i think there is also – and I can only conti­nue to report this as a man – that women expect reco­gni­tion for their achie­ve­ments, without constantly wanting to draw atten­tion to it with great cries of war. But if “Associate‑M(professional)” pursues sustainable self-promo­tion and “Associate‑W(eiblich)” simply does her job perfectly, in the end too often “Associate‑M” is remem­be­red and set.

2. They presen­ted not only diver­sity awards for the German private equity indus­try (GPs) at the “Private Equity Summit” on 23 March in Munich, but also for the asset owners (LPs), the insti­tu­tio­nal inves­tors. Are there any diffe­ren­ces here?

I have to be careful with the answer so as not to give any indi­ca­ti­ons of possi­ble prize­win­ners. Perhaps, regard­less of GP or LP, there is a more advan­ced orga­ni­sa­tio­nal ancho­ring of measu­res in public insti­tu­ti­ons that, for exam­ple, allow women in the child phases not only to conti­nue working, but also to move forward. With GPs or LPs per se, we have not actually been able to disco­ver any rele­vant diffe­ren­ces in the “Diver­sity Fitness”.

At this point, a refe­rence to the first round of the awards is also expli­citly a refe­rence: “Diver­sity” for us means only that there is a more balan­ced distri­bu­tion between male and female employees. “Diver­sity” in a broa­der sense, we have yet to work out metho­di­cally by next year. But some­where you start where the dispro­por­tion is greatest.

By the way, I only have to look into my own asso­cia­tion – but by 2021 the bii will also have done his “big homework”.

3. What do you want to achieve with the Diver­sity Awards? How do you want to solve the problem?

In one of the first confe­rence calls, a lady from the jury so aptly stated that we have to work hard to get rid of the Diver­sity Awards soon, because then no one under­stands why self-evident things should be awarded. But we are not close to that yet. The figu­res mentio­ned in the intro­duc­tion are incre­di­ble and defi­ni­tely the reason for me to have laun­ched the Diver­sity Awards. Level 20, with which we have, of course, exch­an­ged views, require 20 percent of female leader­ship posi­ti­ons. And this mini­mum requi­re­ment is still a long way from realisation.

In the end, we want to moti­vate by exam­ple. Because one thing is certain: “Diver­sity drives perfor­mance.” The self-prosthe­sti­cal PE indus­try in parti­cu­lar should follow its animal spirits and ther­e­fore promote more women to manage­ment posi­ti­ons. Mixed teams are more crea­tive, only they have the 360-degree view.

Dr. Thomas A. Jesch, LL.M. Taxa­tion (George­town)
Geschäfts­füh­ren­der Vorstand / Mana­ging Board Member
bii Fede­ra­tion of Insti­tu­tio­nal Inves­tors, Frank­furt a. Main

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