If you’re a woman thinking of entering the financial sector, you may have thought that all the mentorships, diversity schemes and women’s groups in investment banking now provide the infrastructure to ensure you get a leg up to the senior ranks. In actual fact, you’re more likely to rise to the top in fusty public sector institutions.
A new study by research firm Preqin shows just how difficult it has been for women to rise to the senior ranks within private equity. A paltry 11% of senior roles in the sector are held by women, its research suggests, a figure that rises to 22% at limited partnership firms.
However, more telling is a look at the types of firms where women are well-represented at the senior level. Endowment plans, government agencies, public pension funds – all have over 20% women in senior investment positions.
By contrast, despite often boasting about the diversity of employees by nationality, sovereign wealth funds employ women in just 12% of senior positions – a figure that has declined since 2013 – while family offices, investment banks and insurance firms are also unlikely to offer many opportunities. Just 15% of senior roles in investment banking go to women, according to Preqin’s research.
This is at odds with public declarations of diversity initiatives aimed at encouraging more women into the senior ranks. Helena Morrissey, CEO of Newton Investment Management and founder of the 30% Club aimed at getting more women into the board room, spoke at Cass Business School this week. The idea for the 30% Club, she said, came from a 2009 meeting at Goldman Sachs during a diversity week when it became apparent that most investment banks and fund managers were stuck at the 10-15% mark when it came to senior-ranking women. Little has change, it seems.
In part, this could be down to a lack of willingness to take the sort of risk that could progress their career. Research from recruiters Huxley Associates found that men will apply for jobs even if they only have 40% of the requirements, while women tend to only make an application if they are an 80% fit. Women also tend to be more loyal to their current employer, it suggests, meaning potential employers need to “engage women over longer periods of time” to convince them to move.
This sense of caution among women in finance was echoed by Morrissey this week, who said she is often frustrated by talented female fund managers who decline the opportunity to take on management roles because they over-analyse the potential impact of the new position and it becomes a daunting prospect.
North America seems like the most progressive region for promoting women in the financial sector, with 26% of senior roles occupied by female employees, versus 17.5% in Asia-Pacific and 16.5% in Europe.