“There is more work to be done” on diversity, equity and inclusion in US private equity, say Alexandra Nee and David Quigley in McKinsey & Company’s latest report on diversity in American private equity.
Private equity noses ahead of corporate America in gender diversity in junior roles – but lags at all higher professional levels. “PE firms that aspire to improve gender diversity at the top may want to examine external hiring, retention and promotion processes through to the MD level,” the report says.
Asian employees form the largest ethnic minority group at associate and senior associate levels, while Hispanic, Black and other ethnic groups remain underrepresented. “PE firms have been more ethnically diverse at junior levels than corporate America for the past few years. That is primarily due to the disproportionate hiring of Asians, who constitute more than 60 percent of POC in PE today,” the report states.
Men are promoted more frequently than women at all employment levels except C-suite, McKinsey reports. Fifty-four percent of women investors in private equity reported believing “my career trajectory is limited or evaluation for promotion is somewhat slowed due to my gender”, according to a recent McKinsey poll. Eight percent of women polled believed that their gender was an advantage and 38 percent believed their gender had no effect on their chances of promotion.