◼ FINANCE Bloomberg Businessweek October 7, 20197.133DATA: BLOOMBERG REPORTING. BLOOMBERG COUNTED HEADS OF BUSINESS AND THE TWO MOST SENIOR TITLES ON BUYOUT TEAMS OF EACH FIRM. LIST COMPRISES PREQIN ANALYSIS OF THE LARGEST BUYOUT FIRMS BASED ON CAPITAL RAISED IN LAST 10 YEARS. DATA DOESN'T INCLUDE OTHER ASSET CLASSES SUCH AS REAL ESTATE, INFRASTRUCTURE, AND CREDIT. INCLUDES IMPACT FUNDS.
If private equity dealmakers are a tiny economic
elite, they are a narrow one, too. A Bloomberg
analysis found that women fill only 8% of senior
investment roles globally at the 10 largest firms
that use debt to buy companies. Only one or two
women are present in top positions on the buyout
investment teams of most firms, which are gener-
ally made up of dozens of executives. “There is a
huge retention problem, since nothing has materi-
ally changed at the top,” says Nori Gerardo Lietz, a
senior lecturer at Harvard Business School. “Firms
ought to be asking themselves why.”
If they don’t, clients might force them to—
eventually. The explosive growth of the asset class
has been fueled in part by big checks from large
public pension plans, some of which have been vocal
about social responsibility. More are questioning
managers on their diversity numbers, but few have
used their checkbooks to force change.
Bloomberg’s analysis found that Carlyle Group
LP put the greatest number of women in senior
investment roles, 15, while TPG had the biggest
proportion, with women accounting for 14% of
its team. Apollo Global Management, CVC Capital
Partners, and Hellman & Friedman each had one
lone female making investments.
Apollo raised the largest buyout fund on record,
$24.7 billion, in 2017 and counts California State●Women Are Few
And Far BetweenTeachers’ Retirement System, New York State
Common Retirement Fund, and Oregon Public
Employees’ Retirement Fund among its largest
investors. An Apollo spokesperson says the firm
is strongly committed to continuing to improve
diversity across its business.
Some of the firms analyzed have put women
in leadership roles in other parts of their
organizations, including those that invest in real
estate, infrastructure, and credit. At Blackstone
Group Inc., Kathleen McCarthy is co-head of
the $154 billion real estate group. But PE firms
seem to have struggled more than other kinds
of asset managers, including venture capital and
hedge funds, to boost their number of women in
general, according to a study earlier this year by
data provider Preqin. Women are found mostly in
investor relations, marketing, and finance roles at
PE firms, the study finds.
Especially scarce are women running or co-
managing buyout businesses—the historic heart of
private equity and the source of some of the biggest
profits. Their number can be counted on one hand.
Women lead or co-run funds focused on investing
for social good at Blackstone, Carlyle, and TPG.
“We are focused on continuing to prioritize
diversity in senior positions at TPG and addressing
this industrywide problem that includes disparities
in race and ethnicity, as well as sexual orientation,”
Anilu Vazquez-Ubarri, TPG’s global head of human
resources, said in a statement.
Sandra Horbach oversees about $39 billion
in buyout assets for Carlyle. Private equity is a
relatively young industry, she says. It was started
by men and attracted more men than women early
on, but that’s gradually changing. “When you have
women leading businesses successfully, as we do at
Carlyle, that helps underscore the importance and
benefits of diversity,” she says.
PE firms need to cast a wider net, says Heather
Hammond, a senior member at recruiting
firm Russell Reynolds Associates. She says she
encourages firms to look beyond the usual
banks and other buyout firms when hiring. For
example, someone in corporate development at
an acquisitive industrial conglomerate is likely to
have skills a PE firm can use. “We have to push the
boundaries,” she says.
Some women are breaking through another
way. “I felt like to really be able to run anything I
needed to start my own firm,” says Hollie Haynes,
who founded buyout firm Luminate Capital
Partners after working at Silver Lake Management
LLC. “My memory of being a woman at these firms
is it is really lonely.” �Sabrina Willmerportfolio companies with new debt to extract
dividends this year. Representatives for the four
private equity firms declined to comment.
Little bubbles have already started to pop, giv-
ing debt investors a glimpse of how quickly things
can deteriorate. Bonds issued last year to finance
Kohlberg Kravis Roberts & Co.’s deal to take private
Envision Healthcare, a hospital staffing company,
have already lost almost half their face value after
initiatives in Washington to stop surprise medical
bills spooked investors. (A representative for KKR
declined to comment.) The debt of some other pri-
vate equity-owned companies, including the larg-
est Pizza Hut franchisee in the world and a phone
recycling company, has also fallen in market value
in recent months. “When you have people desper-
ate for yield, buying lower-rated, poor-quality debt,
the question is what’s going to make this stuff blow
out,” says Zwirn. “And it will.” �Davide Scigliuzzo,
Kelsey Butler, and Sally Bakewell● Women’s share of
senior roles in buyout
businesses
TPGCarlyleBainEQTBlackstoneKKRHellman & FriedmanAdventApollo GlobalCVC Capital14.0%11.59.05.95.32.95.63.05.6