Simon Mansfield, DHR

Efforts to improve diversity at hedge funds and PE firms slowly paying off


Efforts to improve gender diversity at UK hedge funds and private equity firms and other investment partnerships is slowly paying off, according to executive search specialists DHR International.

The firm reports that the number of female partners has increased faster than male partners in the last year.
 
DHR International’s analysis of data* provided by the FCA shows that the number of female partners at hedge funds and private equity firms increased by 8 per cent in the last year, whilst the number of male partners rose by just 2 per cent- indicating the efforts to improve diversity are paying off.
 
However, DHR points out that the proportion of female partners is still very low, having risen by less than a percentage point in the last year- from 13 per cent (1285 out of 9603) in 2015 to 14 per cent (1385 out of 9880) in 2016.
 
DHR explains that although hedge funds and private equity houses have started to improve diversity amongst their senior staff, more still needs to be done.
 
Simon Mansfield (pictured), Managing Partner, London at DHR International, says: “The fact that the number of female partners has increased in the last year is a clear sign that the sector is trying to improve its’ gender imbalance.”
 
“However, with the proportion of women in senior positions remaining very low, it’s clear that more still needs to be done.”
 
“Hedge funds and private equity houses often have a reputation of being a ‘boys club’, which can deter women from entering the profession.”Indeed, research has shown that 80 per cent of industry professionals believe it is harder for women to succeed in the sector than it is for male peers.
 
Mansfield adds: “Hedge Funds can be quite small organisations which might not have a full time HR Director in place to help with the diversity agenda- this can make changes harder to implement.
 
“There has also been the suggestion that the inherent risk taking involved in private equity and hedge fund activity has not been an area which female executives have traditionally been attracted to. However, if this is the case we are seeing a shift in that.
 
“Whilst the banks have been under pressure to improve gender diversity, the wider financial services sector have not yet been scrutinised as closely. However, the spotlight may soon shift- therefore firms would do well to act pro-actively before competition for the best talent heats up.”
 
DHR points to pension funds, such as the New York City Retirement System and APG who recently added questions on gender balance to their due diligence questionnaires for alternative investment managers.
 
“Of course diversity shouldn’t be seen just as a tick box exercise but a genuine desire to gain wider skillsets and expertise throughout organisations- but particularly at senior level.
 
“The strategic benefits of having a diverse workforce have been widely accepted- but in practice it can be difficult to put in place.
 
“Diversity imbalances exist at all levels at many organisations, and therefore strategies must be put in place to nurture talent from the entry level upwards. Initiatives such as mentoring schemes or initiating cultural changes can be very beneficial, though may be slow to yield visible results.”
 
DHR International says that whilst the banking sector has been under pressure to improve gender diversity over the last few years, the wider financial sector has not yet been under the same spotlight.
 
Recent research by DHR found that 28 per cent of board directors at the UK’s biggest banks were women in 2017- close to the target of 33 per cent by 2020 set by Lord Davies in the ‘Women on Boards’ report.
 
“Targets for diversity tend to only go so far. Organisations can struggle to access a wide enough selection of talent from their usual channels. Engaging the help of an external agent who will often have a wider list of contacts and channels can help organisations access a more diverse group and hire the best possible person for the position.”

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