Striking the right balance: Private Equity and the diversity challenge

Creating an environment that encourages and enables greater diversity is a priority for many sectors. A fairer playing field in terms of pay, more flexible working, and progressive recruitment strategies are positive steps that many are taking towards achieving a more balanced and, in turn, innovative and profitable business environment.

Presently, the financial sector lags behind with a more profound gender gap than others. The negative publicity associated with gender pay reporting and the inequalities in the industry has raised Government attention and is demanding more is done.

Private Equity as a component of the financial sector is also behind the curve. A recent study by the BVCA found that women receive less than 1p of every £1 of venture capital investment. Similarly, only 5% of all pitches made are by all-female teams and, staggeringly, 83% of deals done in the UK are with all-male founding teams (or a mere 17% of transactions done in the UK have a female member on the founding team).

These statistics highlight that diversity, from a gender perspective, is an issue. If we are to remain in step with broader industry and society, it is something we must be prepared to recognise and tackle.

So, how should Private Equity firms tackle it? Firstly, we must accept that we may exhibit unconscious bias, which is the process of making quick judgements based upon stereotypes without realising it. Being aware of this enables us to challenge our thinking and decision-making.

Secondly, we must measure progress, i.e. how much of our deal flow relates to female-founded businesses? Once we start tracking the breakdown of our deal flow and investments, we can identify areas for improvement and target allocation of capital into companies with a higher level of diversity.

At Panoramic, we are committed to being both a diverse and inclusive employer and investor and we take a proactive approach to ensure this is upheld throughout the investment process. In particular, we pay close attention to our deal flow and on the demographics of the companies and opportunities we evaluate.

Likewise, we encourage our portfolio companies to maintain a similar level of commitment to diversity. With investors and companies collaborating and working toward a common goal, the UK private equity market can become a more all-embracing and inclusive workplace.