Until recently, there were limited women-led events in the private debt markets. However, I have noticed an increase in the variety and frequency of these events and of specific panels addressing diversity. These events are being held all over the world and seem to be in response to the industry’s need to embrace diversity and shift the gender balance in this male-dominated space.
As a delegate at a recent one-day conference in London, it was impressive to see the number of senior women who operate as investors in private debt. However, there is still a significant gap to be filled, which is further hindered by the lack of available talent to choose from.
Industry studies suggest diversity and gender are being targeted through recruitment, and that younger women are being hired in greater numbers, from more diverse channels and that they are being encouraged to develop their careers. However, this needs to be coupled with the right retention policies.
It is easy to point out why diversity works and the positive impact on investment returns that can be achieved through executing a meaningful diversity policy. Investor advocacy through environmental, sustainability and governance reporting and other specific-led diversity requirements are increasingly putting pressure on fund managers to ‘walk the walk’.
At a meeting with a large pension fund client I was asked about my own firm’s diversity policy and gender balance. This was a meeting with three male investment professionals where I was accompanied by two senior female colleagues.
Despite the call to action and renewed purpose we should also consider the reasons why there is a lack of available female talent at the top. The industry has always been difficult to get into, and has traditionally been full of alumni who are ‘pale, male, stale’.
For the few women who are successful enough to get a role and develop significant careers, it has been a brutal industry. Individuals are expected to work exceptionally long hours, weekends and late nights, with harsh travelling schedules, and deal with an ‘old-boy network’ mentality to source investment opportunities. Women have also been expected to do this while being paid less.
Those who do make it to the top, such as legendary investor Nicola Horlick, have been branded ‘superwomen’. With all this in mind it’s hardly surprising that few women are in this industry and that there are few women-led funds. Also, it has been proven that women are less likely to apply for roles for which they may feel underqualified, whereas the opposite is true for men – something that could have an impact on the number of suitable applicants available in the first place.
Addressing the issue
A more practical requirement that needs to be addressed is to provide portfolio companies with more balanced investment teams, in which there are women-led management teams and the founders are female entrepreneurs.
Supporting diversity and inclusion must come from the top. Some firms have been holding themselves accountable externally and provide reports and statistics. Promoting sponsorship and mentor programmes as part of their recruitment and retention policies can benefit companies, and such schemes are on the increase. Management should also visibly support female talent who wish to become involved in external networking bodies.
Other key initiatives involve providing support to women through parental leave, including through flexible working. One senior fund manager told me her fund held regular lunch sessions with eight to 10 employees selected at random. These employees were invited to share their backgrounds, which broke down barriers and helped with team composition and future collaboration as many attendees found they had more in comment than they realised.
Statistics are still difficult to get hold of with regard to diversity and gender balance. But it is encouraging to see that far more attention and investment is being made.
Mia Drennan is the co-founder and group president of Global Loan Agency Services. She is a banking professional with expertise working on global restructuring cases and workouts and has more than 20 years’ experience in capital markets.