Bridging the Diversity Divide in Investing

Mumbai—The private equity and venture capital industry have become an increasingly significant part of economic activity across the world, yet female representation in the alternative investment industry continues to be amongst the lowest. This issue is becoming more urgent in Asian markets, where the number of companies with PE/VC funding has risen sharply and will continue to do so in the next several years. Limited Partners (LPs) have also started asking questions about diversity, with many requiring periodic reporting on DEI from General Partners (GPs).

In this regard, Boston Consulting Group (BCG) in partnership with WinPE (A not for profit platform to bring about transformation in the investing world in favour of gender diversity) have launched a new report titled, “Closing the Gender Gap in Investing – how Indian PE/VC firms can bridge the diversity divide”.

To understand how diversification efforts are progressing in India and other parts of Asia, BCG fielded two surveys in Q4 2021. The first comprised 36 PE/VC firms, 29 of which are based in India and seven in Southeast Asia. The second covers over 80 women from the industry in both India and other parts of Asia. The report also includes learnings from interviews with 20+ PE/VC executives, including women across levels from Associates to Partners and heads of funds, and men in leadership roles.

The report outlines the current state of gender diversity in the Private Equity and Venture Capital industry in India, the efficacy of different types of interventions that have been implemented by firms and persisting obstacles to improving the representation of women in the investing industry. The report also lays out key imperatives for firms as they chart the way forward to bridge the gender gap.

The research indicates clear positive signs – the representation of women in PE/VC firms grew from 16% in 2018 to 25% in 2021, 90% of women feel safe in voicing their opinion at work and 80% say they feel valued and heard. But there is more ground to cover and there are still gaps at mid-senior level roles.

As per the report, initiatives to promote gender diversity broadly target four areas - culture, recruitment, advancement, and leadership.

• Culture: Flexible working hours/locations and support for equal maternity/paternity benefits were rated as highly effective interventions by the women surveyed and offered by over half the firms surveyed. However, women need senior role models to feel more comfortable in taking advantage of these initiatives and policies.
• Recruitment:Increasing focus on recruiting women via a variety of initiatives was perceived to be highly effective. Firms that are making progress in this dimension are doing so by widening the ‘top of the funnel’ – i.e., increasing the number of women they interview for entry level roles, and widening the aperture to hire women laterally from adjacent industries for mid-to-senior level roles.
• Advancement: According to the firms surveyed, the top reason for attrition of women was a life event such as maternity, with working hours and company culture not far behind. Active talent management for high-potential women, and a conscious focus were cited as highly effective interventions to retain and support advancement of women
• Leadership: It is important to offer senior role models to women (within/ outside the geo or business) and it is critical for senior men to champion and jointly drive the gender diversity agenda within their firms.

Speaking at the launch of the report, Kanchan Samtani, Managing Director and Partner, BCG India, said “Looking ahead, to continue to maintain momentum in improving gender diversity, PE/VC firms need to work to increase the number of women they are retaining and hiring into mid-to-senior level roles, encourage cultural acceptance of flexible work hours and hybrid working models across male and female employees. Firms should also look to enhance visibility of senior women role models and build communities.  And it is important for senior men to also sponsor high potential women and champion the gender diversity agenda.” She further added, “There are signs of progress with increasing participation of women, and we hope this report will offer some practicable suggestions for investing firms to consider.”

Nupur Garg, Founder, WinPE said, “WinPE was launched in February 2020 with the vision of enhancing the participation of women in the investing and entrepreneurship ecosystems. Members of the private equity and venture capital industry recognize this imbalance intuitively and corroborate it anecdotally. With this report in collaboration with Boston Consulting Group, we aim to equip them with data that gives shape to the challenge and insights that offer a peek into the solutions.”

A copy of the report can be downloaded here.

About WinPE

WinPE is a pioneering not-for-profit platform established with the objective of enhancing gender diversity within investing and entrepreneurship, increasing the participation of women as investors, capital allocators, and entrepreneurs.

WinPE uses a multi-pronged strategy to achieve its objective, with an emphasis on building the ecosystem to support gender balance. WinPE’s work includes supporting women investors, entrepreneurs and aspirants with resources like mentorship, allyship, networking, leadership development workshops, career bootcamps and masterclasses. Launched in Feb 2020 at the outset of the pandemic, WinPE has already organized more than 35 events that attracted approximately 4500 registrants and were polled with an average satisfaction score of 96%.

In parallel, WinPE has brought together PEVC firms and PEVC backed companies committed to achieving gender balance to form a common agenda. With these firms, WinPE pursues outcome-oriented changes to make the work environment equitable and transform the culture, practices and policies in the ecosystem. WinPE members include DFIs, large pensions, global and regional PEVC firms and leading advisors.