Preqin’s new Women in Alternatives 2022 report shows that although the alternatives industry has not seen a major drop in the proportion of female employees during the Covid-19 pandemic, there is more work to be done to rectify the marked gender imbalance, especially in senior positions.
Gender balance has improved, albeit slowly, across the alternative assets industry as a whole. According to Deloitte, one woman in the C-suite leads to three promotions of women into senior management roles; simply put, the lack of women in leadership positions can negatively affect the prosperity of women in the industry as a whole. Preqin data shows that an eighth (12.9 per cent) of senior positions in the alternatives industry are held by women. As of January 2022, 20.9 per cent of the alternative assets workforce is female – and when looking at investors alone this rises to 24.2 per cent (up from 20.3 per cent and 24.0 per cent respectively a year earlier).
When looking at the female representation in different asset classes, regionally, European private debt fund managers employ the most women – up from 21.6 per cent in 2021 to 22.8 per cent this year. Rest of World real estate fund managers have the lowest proportion of women on staff – down from 17.3 per cent in 2021 to 15.1 per cent in 2022. In terms of asset classes, infrastructure leads the way with 28.6 per cent female workforce, compared with 24.1 per cent globally; and private equity trails the pack, employing 23.6 per cent women in North America and 21.9 per cent globally.
As of February 2022, just one-fifth (20.5 per cent) of total private equity fund manager employees were women, the Preqin report shows. While that proportion has increased for the past three years in North America, Europe, and Asia — although by less than one percentage point annually — Rest of World recorded a decline from 18.9 per cent in 2020 to 18.3 per cent in 2021. At senior levels, there are even fewer women; only 9 per cent of CEOs and 8.2 per cent of board members are female.
Women continue to be underrepresented throughout the workforce in financial services. Deloitte estimates that 24 per cent of senior roles were held by women across financial services in 2021. In alternative assets, the figures are worse still, with Preqin data showing only 12.9 per cent of senior positions held by women.
At fund manager level, the proportion of women in the workforce ranges from 18.9 per cent at real estate firms to 21.1 per cent at venture capital, private debt, and natural resources firms. The proportion of women in senior positions ranges from 13 per cent, in venture capital, to just 9.8 per cent in real estate. Interestingly, real estate boasts the highest proportion of female employees at junior level (36.3 per cent), making the drop between junior and senior level even more pronounced.
Investors have better female representation throughout the workforce, with 34.4 per cent of junior positions, 26.1 per cent of mid-level positions and 16.7 per cent of senior roles filled by women.
Women have been more successful at launching and managing venture capital funds than in any other alternative asset class. The number of female-owned funds holding their first close jumped from 32 in 2013 to 158 in 2022, an increase of almost 400 per cent in a decade, which is considerably faster than in private equity (where the increase was 32.1 per cent), and real estate (133.3 per cent) — the only other asset classes where the number of first closes for 2022 is in double digits.
Furthermore, female-founded start-ups backed by venture capital funds raised an average USD935,000 (compared to men-founded ones: USD2.1mn) and generated USD730,000 in revenue (men: USD660,000). A study by Boston Consulting Group and MassChallenge2, a US-based network of business accelerators, looked at 350 companies and found that start-ups with at least one female founder raised less money than those with male founders, but generated more revenue over a five-year period. The same study found that, expressed in revenue per dollar invested, female-founded start-ups backed by venture capital outperformed their male-founded counterparts by a considerable margin, returning 78 cents per dollar against 31c ents for companies with male founders.