Making diversity happen

Looking back at the last 25 years I am pleased to see that the working world has changed fundamentally. The days when having a work-life balance was a distant dream for those wanting to forge a reputation and avoid being perceived as a failure are no longer the norm.

Slowly but surely the tides are changing as the financial services industry tries to adapt to a society which better values diversity and the importance of a good work-life balance. However, there is a long way to go for us all, unfortunately, as many exceptions remain.

A change in mindset

In private debt specifically, some firms are starting to realise that promoting diversity is not just the ‘right thing to do’, but it is also economically sensible. In line with broader societal change, institutional investors are becoming more demanding when it comes to board and investment team compositions, as they also need to respond to their constituents’ demands for more diverse and sustainable investments. Additionally, for the first time, managers are spotting a link between internal culture and positive economic outcomes.

But we’re by no means near a eureka moment when it comes to diversity. We are still faced with a ‘drop everything’ culture across private equity, private debt and many other sub-sectors of investment management.

From my experience in both investment banking and private debt, deadlines are frequently artificial, and at present not enough people are stepping back to say ‘does that really need to happen tonight?’ or ‘this can wait until tomorrow’. This needs to change.

“As junior members mature into senior investment specialists and become the leaders of tomorrow, being able to give perspectives rather than run numbers becomes imperative”

Nicole Downer
MV Credit

There is a common misconception that workaholics are naturally good professionals. However, as junior members mature into senior investment specialists and become the leaders of tomorrow, being able to give perspectives rather than run numbers becomes imperative to clients.

Such perspectives can only be informed by an established, well-balanced work and personal life, but also with the skillset acquired by having worked in varied environments with multiple perspectives and experiences.

While finance professionals continue to be paid to do the jobs of two people, truly diverse teams will remain a distant aspiration rather than an achievable reality. The industry must act on this cultural reform that’s needed in order to allow parents to parent, individuals to have time to enjoy their hobbies and, most importantly, to encourage a more culturally diverse perspective before clients force it into action.

This is what fundamentally prevents diverse internal cultures in financial services and, in turn, diverse investment thinking.

Only an industry-wide approach will work

Different viewpoints enhance company culture and enable a more creative approach. At MV Credit, we don’t just talk about it; of 32 members in the team, 18 are female.

At the senior level, 38 percent of employees are women and at the managing partner level we have 20 percent female representation. This compares favourably to the industry average of 19 percent of women at private debt firms at all levels, 11 percent representation at the senior level and just 5 percent at the managing partner level.

But increasing diversity does not stop with hiring women. It also means employing people from different backgrounds, ethnicity, sexual inclination and nationalities. We firmly believe our diversity creates greater opportunities and fosters sharper insight for our investors, but promoting a culture which truly embraces diversity needs to be an industry-wide effort. By doing so, we can make lack of diversity an issue of the past.