Despite gender parity among business school graduates, gender diversity in the private equity industry remains shockingly low.
A new report by Michael Ewens, the David L. and Elsie M. Dodd Professor of Finance in the Finance Division at Columbia Business School, presents an in-depth analysis of the gender discrepancy among investment professionals in 661 firms in the US private equity industry.
Ewens found that only about 22 percent of investment professionals are women — and at the senior level, only 6 percent. To reach gender parity, firms must attract, retain, and promote more women. This report suggests how.
How the research was done: To study the problem, Ewens and his co-researchers compiled one of the largest published databases on the US private equity market. Because the team wanted the database to eventually be an open sourced and publicly available resource, the researchers had to start from scratch rather than use data from commercial providers. They accessed publicly available regulatory information, hand-combed data from LinkedIn, and collaborated with industry professionals.
In addition to building the database, the team conducted a qualitative investigation with seven focus groups, which included female investment, DEI, and HR professionals. The focus groups provided a richer context for the research and helped devise recommendations for attracting, retaining, and promoting talented women.
What the report found: The data collected by the team revealed a substantial lack of gender equity in the industry:
- Between 2021 and 2023, female representation among all investment professionals increased only 2 percentage points from about 20 percent to about 22 percent.
- Between 2021 and 2023, female representation at the senior level stayed around 6 percent.
- Between 2021 and 2023, female representation at the mid-level increased from 18 percent to 20 percent. Female representation at the junior level increased from 25 percent to 27 percent.
- In general, larger firms had more gender parity than smaller firms.
- Only 5 percent of firms were female-founded, and 4 percent of firms had female managing partners and CEOs. Of the 661 firms, 349 had no women in senior roles.
- 31 percent of firms had investment teams with no women.
The researchers have not yet explored why such stark gender disparities exist in private equity, but Ewens does rule out a talent problem: “If you look at other data sets, roughly 40 percent to 45 percent of investment banking junior analysts and associates are women. And that's where a lot of private equity professionals are sourced. With MBAs, roughly half of our incoming class are women. Not all of those women are in finance, but nonetheless, there is no talent pool problem.”
Suggestions for attracting more women include making women in the firm more publicly visible, establishing undergraduate internship programs and supporting career forums to demystify the private equity industry, and providing technical skills training for recruits. To retain women, the report suggests that firms implement flexibility that accounts for family responsibilities, mentorship structures that offer formalized support, and initiatives that make office culture more meaningfully inclusive. In looking at promotion practices, the researchers bring up the importance of giving women feedback, transparency about expectations, and sponsorship from senior leaders.
Why the research matters: In the near term, the researchers hope the report can help serve as a benchmark to give firms an idea of how they’re doing on gender equity in comparison to the industry in general. In the longer term, the team plans to continue adding to and updating the database on a yearly basis. They hope the data will eventually be complete enough to track firms, track the industry over time, and tease out the effectiveness of different policies that can help promote gender equality.
Ewens believes gender equity in the industry is important not only for the sake of justice and equality but also because a dearth of women may simply be bad for the bottom line. “When one sees discrepancies by gender in an area where a lot of money and value are being created, it just looks inefficient,” he explains. Since there’s no reason why women and men shouldn't be equally good at these jobs, a gender gap would suggest foregone talent and lost opportunity. “Obviously, there’s money being left on the table.”
Ewens, while careful to clarify that he is speculating, also suggests that a diversity of perspectives on teams would benefit the firm’s work of adding value, picking companies, structuring deals, and exiting.
“What I'm saying on diversity is a hypothesis. It's tough to prove with data,” he says. “But I think most of us have been in situations where we're building something or solving complex problems. When the team is comprised of all the same people, backgrounds and experiences, it usually doesn't work out as well.”
It was for similar reasons that the team wanted to ensure that its database could be public. Commercial subscriptions that give researchers access to data can be very expensive, and not all researchers outside top institutions have access to it.
“Much like diversity matters on the industry side, I think diversity on the academic side allows for new perspectives and different questions,” Ewens says. “They approach the problem in different ways, and that generally produces better academic research.”
Adapted from “Female Investment Professionals in US Private Equity: A Numerical Analysis and Opportunities for Further Exploration” by Michael Ewens of Columbia Business School, Jill Fink of Three Cairns Group, and Joseph Choi of Columbia Business School.
