French Private Equity Has a Problem With Equality, Firms Warned
Better returns would be nice, but there’s something else urgently needed at France’s private equity firms: more women.
That’s the message from the body representing the nation’s private equity industry, France Invest, which wants its members to commit to putting more women in senior roles. In 2018, about a quarter of staff on investment teams were female, up from 17% a decade ago, according to Dominique Gaillard, France Invest’s president.
“At this rate it will take until 2045 to achieve gender parity,” Gaillard said in an interview. “That is too long.”
To be fair, the French aren’t doing too badly on a global comparison. A recent Bloomberg analysis found that women fill only 8% of senior investment roles globally at the 10 largest firms that use debt to buy companies.
Nevertheless, France Invest is pressing ahead: the association will ask its 326 members to sign a 30-point diversity charter next month. Among commitments sought are targets for hiring and retaining female staff, while training will also be provided for companies that want, but aren’t sure how, to improve. This will include guidance on avoiding bias when recruiting, mentoring programs, and best practices around maternity and paternity leave.
It’s the latest effort by the financial industry to respond to demands from investors and the public to address widespread allegations and evidence of bias and abuse against female workers. Private equity managers are under pressure to step up and do more to improve diversity among their ranks, as well as at firms in their portfolios.
Gaillard said his members’ investors, which include the world’s largest pension and sovereign wealth funds, will push them to endorse the charter. Improving diversity also raises firms’ brands in a tight labor market and helps attract talented female executives, he said.
The call to action has become a familiar cry as money managers are being asked to look beyond pure profit and incorporate broader environmental, social and governance criteria when investing.
Private equity needs to take its responsibility toward such issues seriously or it will come under fire, Paris-based Eurazeo SE Chief Executive Officer Virginie Morgon said at the IPEM conference in Cannes last week.
“We had better be ready to show how much we helped, not just make money,” she said.
©2020 Bloomberg L.P.