Posted: 26 April 2021

The benefits of driving gender diversity in private equity

The benefits of driving gender diversity in private equity

WestBridge is ahead of the curve in understanding the benefits of gender diversity within its investment team and portfolio businesses. Here investment manager Rebecca Sinclair explores the subject.

In recent years, the private equity industry has increasingly focused on improving gender diversity, especially within investment teams and portfolio boards. As well as being important from an inclusion and equality perspective, recent studies have shown that buyout teams with at least one woman outperformed all-male teams by an average of 12% IRR. 

Meanwhile, it has been shown that investment committees with at least one female member reduce the average capital loss ratio of a fund by 8%, to 12%. Despite this, only 20% of investment team members are female, with only 10% in senior roles.

WestBridge embraces diversity. Virtually half our senior team and a third of our wider investment team is female.

I am proud to be part of an organisation that so evidently embraces diversity and truly appreciate our inclusive culture where every individual within the team knows they are valued and respected for their skill and expertise.

Our approach is not just internally focussed.  As our portfolio companies grow, it becomes increasingly important that they reflect wider society.

Currently, over half our current fund’s portfolio companies have women on their boards.  All have women in executive management roles.  In short, we don’t just view diversity and inclusion as a ‘tick box’ exercise. We actively encourage and promote it.

It goes without saying that individuals have to be selected for their skills, expertise and ambition.  My colleague Valerie Kendall, one of the WestBridge founding partners, adds her observation that having diversity of all kinds within our portfolio businesses and their management teams stimulates dynamic board discussions and helps provide different perspectives.

Lisa Kerford, managing director of Aptus Utilities, shared her thoughts on the role of gender diversity at a board level:

“I am proud that the effort I’ve put in since starting my career, along with my strong work ethic, has enabled me to achieve a senior role in the construction industry. I have confidence in my ability and have never had to justify my position, which has been achieved by gaining respect from peers and colleagues for the work I have undertaken and the leadership I provide. My gender as a leader in a senior role never enters my thoughts.”

Surely, this is exactly how it should be? And surely it’s time the wider private equity industry absorbed the hard facts at the start of this piece and realised the opportunities they are missing to capitalise on the wealth of untapped female talent.

Typically, WestBridge invests between £10m and £25m in established, profitable and fast-growing UK SMEs with enterprise values of up to £50m.  We are always keen to hear from ambitious management teams that require development capital, acquisition funding or support for a management buyout.  To hear more about our investment criteria or discuss the suitability of a company, do get in touch.

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