Bloomberg Businessweek - USA (2019-10-07)

◼ FINANCE Bloomberg Businessweek October 7, 2019

7.1

33

DATA: 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

INLAST

10

YEARS.

DATA

DOESN'T

INCLUDE

OTHER

ASSET

CLASSES

SUCH

AS

REAL

ESTATE,

INFRASTRUCTURE,

AND

CREDIT.

INCLUDES

IMPACT

FUNDS.

If privateequitydealmakersarea tinyeconomic

elite,theyarea narrowone,too.ABloomberg

analysisfoundthatwomenfillonly8%ofsenior

investmentrolesgloballyatthe 10 largestfirms

thatusedebttobuycompanies.Onlyoneortwo

womenarepresentintoppositionsonthebuyout

investmentteamsofmostfirms,whicharegener-

allymadeupofdozensofexecutives.“Thereis a

hugeretentionproblem,sincenothinghasmateri-

allychangedatthetop,”saysNoriGerardoLietz,a

seniorlectureratHarvardBusinessSchool.“Firms

oughttobeaskingthemselveswhy.”

Ifthey don’t,clients mightforce themto—

eventually.Theexplosivegrowthoftheassetclass

hasbeenfueledinpartbybigchecksfromlarge

publicpensionplans,someofwhichhavebeenvocal

aboutsocialresponsibility.Morearequestioning

managersontheirdiversitynumbers,butfewhave

usedtheircheckbookstoforcechange.

Bloomberg’sanalysisfoundthatCarlyleGroup

LPputthegreatestnumberofwomeninsenior

investmentroles,15,whileTPGhadthebiggest

proportion,withwomenaccountingfor14%of

itsteam.ApolloGlobalManagement,CVCCapital

Partners,andHellman& Friedmaneachhadone

lonefemalemakinginvestments.

Apolloraisedthelargestbuyoutfundonrecord,

$24.7billion,in 2017 andcountsCaliforniaState

●WomenAreFew

AndFarBetween

Teachers’RetirementSystem,NewYork State

CommonRetirementFund,andOregonPublic

Employees’RetirementFundamongitslargest

investors.AnApollospokespersonsaysthefirm

isstronglycommittedtocontinuingtoimprove

diversityacrossitsbusiness.

Someofthefirmsanalyzedhaveputwomen

in leadership roles in other parts of their

organizations,includingthosethatinvestinreal

estate,infrastructure,andcredit.AtBlackstone

GroupInc., KathleenMcCarthyisco-head of

the$154billionrealestategroup.ButPEfirms

seemtohavestruggledmorethanotherkinds

ofassetmanagers,includingventurecapitaland

hedgefunds,toboosttheirnumberofwomenin

general,accordingtoa studyearlierthisyearby

dataproviderPreqin.Womenarefoundmostlyin

investorrelations,marketing,andfinancerolesat

PEfirms,thestudyfinds.

Especiallyscarcearewomenrunningorco-

managingbuyoutbusinesses—thehistoricheartof

privateequityandthesourceofsomeofthebiggest

profits.Theirnumbercanbecountedononehand.

Womenleadorco-runfundsfocusedoninvesting

forsocialgoodatBlackstone,Carlyle,andTPG.

“Wearefocusedoncontinuingtoprioritize

diversityinseniorpositionsatTPGandaddressing

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 Willmer

portfolio companies with new debt to extract

dividends this year. Representatives for the four

private equity firms declined to comment.

Littlebubbleshavealreadystartedtopop,giv-

ingdebtinvestorsa glimpseofhowquicklythings

candeteriorate.Bondsissuedlastyeartofinance

KohlbergKravisRoberts& Co.’sdealtotakeprivate

EnvisionHealthcare,a hospitalstaffingcompany,

havealreadylostalmosthalftheirfacevalueafter

initiativesinWashingtontostopsurprisemedical

billsspookedinvestors.(ArepresentativeforKKR

declinedtocomment.)Thedebtofsomeotherpri-

vateequity-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

TPG

Carlyle

Bain

EQT

Blackstone

KKR

Hellman& Friedman

Advent

ApolloGlobal

CVCCapital

14.0%

11.5

9.0

5.9

5.3

2.9

5.6

3.0

5.6