Five takeaways from the BVCA and Level 20’s diversity report

More than half of UK and continental investment teams were all-white last year and 12% featured no women, according to analysis by the two organisations.

A report this week from the British Private Equity & Venture Capital Association and Level 20 further highlights the lack of gender and ethnic diversity in senior roles within the private equity and venture capital industry.

Findings from the Diversity & Inclusion Survey 2021 reveal the industry is severely lacking ethnic diversity. Representation at senior levels, regardless of gender, show only 1 percent of individuals are Black, 1 percent are multi-ethnic/mixed and 9 percent are Asian.

The industry has made some progress towards attracting women – the proportion of women working in investment roles has improved across senior (10 percent), mid- (20 percent) and junior levels (33 percent) in small-, mid- and large-cap firms. Still, some 12 percent of firms in the study have no women at all in their investment teams.

“The findings show that the private equity and venture capital community have a long way to go on diversity. In particular, the lack of Black representation is especially troubling,” Jacqueline Taiwo, co-founder and chair of Black Women in Asset Management, said in the report. “Investment firms must interrogate the systemic causes for this inequity and urgently address the barriers to building diverse and inclusive investment teams.”

Readers of affiliate title BuyoutsMarch issue on women in private equity highlight that an entrenched power structure, choosing the “mommy track” and the lack of having a champion among senior partners are among the reasons why there is less female representation in deal teams.

Said one reader: “There will be more women in senior roles in PE when firms recruit, mentor and promote them into those roles…at this point I only see that happening when LPs demand it.”

Another reader noted that male perceptions of “how a woman ‘should be’ is the problem”.

“Two men can have a discussion over a deal, curse and call each other names, then shake hands and brush it off,” the reader noted. “A man and a woman can have the same discussion, but it will be labelled an argument, and it never ends the same way. The man will constantly complain to his superiors about the woman, will refuse to work with the woman because she challenged him and will make it difficult for her to advance. The woman is usually berated internally and super-rarely supported.”

The report, which gathered data from 186 PE, VC and growth capital firms in the UK and Europe, is the first of its kind to capture ethnicity data from firms, the BVCA noted. The ethnicity survey includes data from 2,703 individuals across 73 firms.