Private equity firms are bringing aboard just about one woman for every two men this year across all roles and levels, according to a large sample of U.S., Canada and U.K. hiring analyzed by Private Equity Career News. It suggests progress on the industry’s belated march toward gender diversity.
The industry, moreover, appears to be making headway in drawing more African-Americans into its ranks. A review of the same sample finds that roughly 5 percent of new hires this year by private equity firms are African-American, with junior hires at 6 percent, mid-level at 5 percent and senior at 4 percent.
Surprisingly, with so much attention being paid to diversity, the industry doesn’t have a whole lot of benchmarks to work with. A widely cited 2020 report on gender diversity by Preqin puts the percentage of female employees in North American private equity at just under 20 percent, with junior levels far more gender diverse than senior levels. So the 32 percent figure tallied for female hiring across all levels and roles by Private Equity Career News this year marks a big step forward. But there’s room for improvement. Excluding farmworkers and the self-employed, women make up about half of the U.S. workforce, according to the Bureau of Labor Statistics.
Good statistics on diversity by ethnicity are even harder to find. According to this article published by consulting firm McKinsey & Co, just 1 percent to 2 percent of members of investment deal teams at 150 North American private equity firms are African American. Again, our tally of 5 percent across all positions suggests advancement. Black Americans make up about 13 percent of the U.S. workforce, according to the Bureau of Labor Statistics.
Interestingly, by our count private equity firms are hiring all ethnic minorities, as defined by the Department of Labor, at a rate that’s higher than their participation rate in the labor force. Some 28 percent of private equity hires this year are non-white, compared with 22 percent representation in the U.S. workforce. The figure is 34 percent for hiring in the junior PE ranks.
What Private Equity Career News calls its PE Diversitometer is based on hiring reported by the newsletter so far in 2021. All told, the newsletter reported on 618 hires in which the editors assigned a gender; it reported on 611 hires in which the editors assigned an ethnicity. The newsletter only tracks a portion of industry hiring, but the editors believe the sample to be reasonably representative. It tracks both investment and administrative roles at every level.
Members of PrivateEquityCareer.com have access to the full hiring database, including assignments of gender and ethnicity, on which the benchmark is based. Become a member now for as little as $15/month.