Female Dealmakers are Getting Together and Forging Ahead

Michelle Van Hellemont was relatively new to the private equity community the first time she attended an Association for Corporate Growth (ACG) event. It was 2004, and she was working for a small consulting firm serving the PE industry. The CEO of the firm told her ACG was a great place to meet clients.

“So I walked into the lunch, a bit intimidated by the scene, and I quickly found the one other woman in the room. She grabbed onto me and shepherded me around. I didn’t even know her.”

A few weeks later, Van Hellemont says, “I wound up at another event — that one connection had made me feel comfortable.  I was introduced to the president of the NY chapter of ACG.”

This time, she wasn’t galled. “I said to him, ‘Something here needs to change. You need more women.’

“‘He looked at me and said, ‘Are you volunteering?’ And I said, ‘I guess I am.’”

A Notable Imbalance

Van Hellemont’s observation is largely true of the finance industry at large. According to a 2014 survey by Preqin, only 11% of senior private equity professionals in North America-based PE firms were women. In U.S. investment banking, the figure is 35.4%, according to Catalyst.

The numbers drop off further for more senior positions. Bloomberg reported that women made up only 10.9 percent of senior managers at the 10 biggest PE firms. Similarly, only 16 percent of senior-level officials in investment banking are female.

One could argue that these numbers are indicative of a larger bias against women among the industry. For example, a 2014 survey from Coller Capital reported that while 59% of LP respondents believed that PE firms generally benefit from gender-diversity — only 12% of respondents believe that having more senior women in GPs would directly impact returns.

Drumming Up Deal Flow  

Van Hellemont — now the director of business development for consulting firm Accordion Partners — soon made good on her word, co-founding ACG’s Women of Leadership Committee in New York. The Women of Leadership Committee focuses on making connections between women in the deal-making community. The committee puts on events that are women-only and that provide an exclusive opportunity for women to network and hear from industry leaders. Events typically draw between 50 and 150 women, and the committee’s third annual Summit is coming up in January 2016.

There are other similar initiatives doing great work to promote women in the space. Marcia Nelson worked in business development in the financial services industry for 15 years before founding Deals & Divas, which organizes networking events, educational programs, and social activities for females in the deal space. Deals & Divas holds networking events that typically draw 60-100 women, as well as smaller roundtables with 10-15 attendees.

Targeted networking events are also hosted through more general channels. For example, Todd Kinney, director of business development at consulting firm BDO, runs a monthly networking breakfast. Twice a year, he holds a women-only event for female deal professionals.

The focus of all these groups, the organizers stress, is learning, networking, and increasing deal flow. “We don’t walk up to one another and talk about the struggle of being a woman in the industry,” says Van Hellemont. “There may be a perception that women get together just to talk about growing women in the industry,” but that’s not an explicit focus. “The sheer volume of women is inspiring. All of a sudden you’re in a room with 75 talented, bright, driven women — who wouldn’t want to be part of that energy?”

Staying in the Game

Networking events help create a sense of community and support women in the industry. But what about more practical concerns? How do women juggle raising families with long hours, frequent travel, and other demands of an always-on industry?

Amy Wolf, now a partner at River Hollow Partners, a lower mid-market private equity firm, began her career as an analyst at Goldman Sachs. She estimates that half the analysts were women — “it was pretty balanced.” But, Wolf says, “what happens is that as you get more senior and people start having families, then the number of women diminish. It can be a hard balance in a bigger firm.”

Wolf left banking before that was an issue for her, going on to become a successful retail entrepreneur. When she entered private equity years later, it was as a partner. “I don’t think of myself as a woman in the private equity world,” says Wolf. “I just think of myself as a professional. I don’t feel like I ever get treated differently because I’m a woman, or ask for special treatment. However, my kids are still teenagers right now, and I want to be able to balance that. We have a terrific dynamic at our firm where we work very hard, but we’re not clock punchers. I’ve found a partner in a firm with a work environment that makes sense for me.”

Increasingly, bigger PE firms are recognizing the challenges of integrating work and home life, particularly for new parents. This summer, for example, private equity firm KKR announced it would pay for employees to bring young children and a nanny with them on work trips until the child’s first birthday. KKR also boasts 16-week leave for primary caregivers, a rarity in the U.S.

These steps provide caregivers with more flexibility as they continue to progress in their career. But some argue that perks alone won’t solve our work-life conundrum, and in fact miss the point. “This new raft of ‘perks’ shows how trapped we still are in a work culture that prizes total availability at the office at all times,” argues Anne Weisberg in the New York Times. “We need to reimagine leadership so that the ideal workers are not the ones who stay at work the latest, but the ones who get all their work done and leave at a reasonable hour; they are not the ones who get on a plane on a moment’s notice, even with a nanny in tow, but the ones who figure out how to conduct the meeting without having to travel.”

A Domino Effect

More senior women in the investment community can lead to more diversity in the types of companies finding funding. For example, half of the employees of private equity firm TSG Consumer Partners are women, with a large number in senior investment roles. The firm has made multiple investments in companies run by women, as well as those whose products are targeted to a female demographic.

TSG recently invested $50 billion in Revolve in 2012, an uber-trendy L.A. apparel company targeted at what Fortune Magazine calls “self-styled bon vivants and high-low cultural nomads.” Jennifer Baxter Moser, a partner at TSG recently named one of “Private Equity’s Women to Watch” by Private Equity Analyst, was a customer of the company before doing the deal. For a company hyper-focused on identifying and serving its core demographic, partnering with a firm whose investors understood their business model and strategy first-hand was likely key. Since the investment, sales growth has increased from approximately 25% a year to more than 50%.

The same is true for TSG’s recent exit from thinkThin, LLC, a “maker of wholesome, protein-rich foods.” Hadley Mullin, a senior managing director and the No. 3 executive at TSG, was also an “avid consumer” of thinkThin, and according to an article by Women’s PE Briefs, “tracked thinkThin for more than five years prior to making the acquisition.” ThinkThin, whose core customer base is female, is also run by women — it was founded by Lizanne Falsetto and its current CEO is Michelle Kessler.

Promoting and providing support for women-led companies is yet another positive consequence of more women in senior PE roles.

Patricia Lizarraga is the founder and managing partner of Hypatia Capital, a private equity fund focused on sponsoring female CEO (like Moser, she was also featured on Private Equity Analyst’s list of women to watch in PE).

After a career in banking and private equity, Lizarraga realized that she enjoyed her work — but she wanted to have more female clients.

“The deal business is dynamic and challenging and intellectually stimulating, and I enjoy being in it,” says Lizarraga. “But I also want a gender-balanced life. So to the extent that few of my clients and colleagues in senior positions are women, that becomes something I want to change. I thought to myself, if I want to have a gender-balanced portfolio, I’ll have to create it myself.”

Hypatia has developed programming events targeted events targeted at providing key information regarding deal sourcing, compensation, and dynamics of being the CEO of a private equity-owned portfolio company.

“It’s lonely for guys at the top,” says Lizarraga. “Can you imagine how is it for women?”