BLOG: Private equity and diversity: Achieving our ambitions

Events over the past year have focused attention on issues related to inequality, representation and inclusion. For professional services, light has once again been thrown onto the importance of diversity – and on the distance left to travel to achieve true diversity across some industries and sectors. Despite progress over recent years, private equity is one such industry.

This is a moral imperative, of course, but it’s also a business one. Consultancy McKinsey’s latest study in this area, published in March 2020, found that across 1,000 large companies in 15 countries, those in the top quartile for gender diversity were on average 25% more likely to achieve above-average performance, while those in the top quartile for ethnic diversity were 36% more likely.

For private equity investors, diversity is potentially, therefore, another lever to create value at the companies in which we invest. But it’s also important to recognise that this logic applies equally to our own businesses. At Pantheon, our inclusion ethos is founded on the premise that harnessing our differences will create a productive environment in which everybody feels valued, where talents are fully utilised and in which, ultimately, our organisational goals are met.

We’ve long been a leader in our industry on gender diversity: for example, 41% of our global staff are women, including 43% of investment team heads. By way of comparison, according to a recent BVCA study, the proportion of senior investment roles held by women at firms with >£100m AUM was just 10%. On ethnicity, 33% of our global staff are from non-white backgrounds.

Commitment to continuous progress

Of course, diversity statistics are just an output that is achieved by building an inclusive culture covering all aspects of working life, from the way a firm recruits to the broader support offered to colleagues. And we recognise that we are at the beginning of our journey, not the end.

Earlier this year, we published a new inclusion and diversity report and policy, both of which are available on our website, setting out our commitment to continuous progress. In particular, we set out three pillars to help us achieve our ambitions:

1. Inclusive policies: Incorporation of industry leading I&D practice approaches into all relevant Pantheon corporate policies
2. A united culture: Commitment to how we build our teams and cultivate our leaders through diversity, driving an inclusive culture that feels like the right ‘fit’ for everyone
3. Progressive partnerships: Establish partnerships with organisations that embody our vision and help drive our success.

Publishing our new I&D policy was the first step to building up our first pillar. In the coming two years we will conduct a comprehensive review of all of our corporate policies, including benchmarking against industry best practice, to ensure we incorporate inclusive principles right across our firm.

On the second pillar, creating a united culture, we have laid a strong foundation by developing a wide range of events, including inclusion-focused Town Hall meetings for all of our staff, as well as producing a range of education initiatives to support, encourage and inspire our staff. We will continue to build on this by developing our range of community forums and encouraging continued and constructive colleague participation and feedback.

As we continue to grow and build on our culture, recruitment is the key source to improving our diversity. Our dedicated in-house recruitment team acts as a gatekeeper to ensure we are only working with agencies that share our ethos and commitment to improving both diversity and inclusion in the workplace.

As for our partnerships, we have formed relationships with a wide range of organisations promoting and championing inclusion in a wide variety of ways, including recently signing up to the 100 Black Interns project, becoming a member of LGBT+ support network Out Investors and partnering with the Diversity Project in the UK. It is through the work with our partnerships that we aim to improve the ‘pool of candidates’ that we can hire from and to help other companies do the same. We will continue to work with our partners and engage with our colleagues to review and measure the success of our efforts in the months ahead.

Looking ahead

We’re proud of our progress so far in making Pantheon a truly inclusive workplace – and we were humbled to have recently been named winner of the Diversity Award at this year’s MoneyAge The Asset Management Awards. It was also pleasing to see that judges recognised not just our longer-term focus on areas such as gender balance, but also the broader ways we are supporting our teams, including through a range of mental health awareness initiatives during the pandemic.

But we are just as committed to ensuring that we do not rest on our laurels and instead we look to the future and continue to develop, learn and progress. We believe this is one important way we can ensure continued success in the future – both within our own firm, and for our clients, employees and global communities.

Important Disclosure

The views and opinions expressed herein by Paul Ward are his own views as of the date of the publication, and may change in response to changing circumstances and market conditions.

Under no circumstances should these views and opinions in this article be construed by any reader as investment, securities, legal, or tax advice. The information contained herein should not be deemed as a recommendation to purchase or sell any securities or investments.

No representation or warranty, express or implied, is made or can be given with respect to the accuracy or completeness of the information in this article. In general, alternative investments such as private equity involve a high degree of risk, including potential loss of principal invested, are highly illiquid, can charge higher fees than other investments, and typically do not grow at an even rate of return and may decline in value.

Information, opinions, or commentary concerning the financial markets, economic conditions, or other topical subject matter were prepared, written, or created prior to posting this article on this Site and do not reflect current, up-to-date, market or economic conditions. Pantheon disclaims any responsibility to update such information, opinions, or commentary.

In addition, past performance is not indicative of future results, future results are not guaranteed, and loss of principal may occur. This article may include “forward-looking statements”. All projections, forecasts or related statements or expressions of opinion are forward-looking statements. Although the interviewees believe that the expectations reflected in such forward-looking statements are reasonable, they can give no assurance that such expectations will prove to be correct, and such forward-looking statements should not be regarded as a guarantee, prediction or definitive statement of fact or probability.

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