Neuberger Berman's Patricia Miller Zollar (far right), speaking at IPEM 2022. She is joined by Elena Laleh, Kline Hill Partners (left) and Helen Steers, Pantheon Investment Partners (middle)

When Neuberger Berman looks at a fund manager’s website “and all of the investment team managers are male and white, that’s a problem. You really feel like these folks might be dinosaurs,” said Patricia Miller Zollar, managing director and head of the investment consultancy’s private equity emerging managers strategy.

Neuberger Berman deployed approximately $3.5 billion of clients’ capital to “just under 90” funds through this strategy last year, said Miller Zollar, speaking at the IPEM 2022 conference in Cannes last week. The strategy, known as NorthBound Equity Partners Platform, covers private equity funds under $1 billion, on their first or second vintage or owned by women and minorities, according to Neuberger Berman’s website.

Emerging managers generally have smaller and more diverse leadership, said Miller Zollar. “These individuals are hungry. They have niche specialisms and different networks to leverage in their portfolios.” This presents a unique value proposition that many of Neuberger Berman’s clients want to tap into, said Miller Zollar.

There is more ethnic than gender diversity among the emerging managers that Miller Zollar sees, she continued. This is because “most of what we do is buyout and growth. The women-led firms are by and large on the venture side.”

Regarding the private equity industry as a whole, Miller Zollar feels “encouraged about diversity like never before”. In her 35 years in finance, “there has never been a time when we didn’t talk about diversity”, she said. But there is now “a combination of the carrot and stick” to incentivise progress in the industry. “Specifically in private equity, folks are very much rational economic animals. Historically there was not much benefit to getting it right and not much penalty if you got it wrong.”

Carmela Mendoza contributed to this report.