Despite all the progress in the quarter-century since the term “glass ceiling” was coined, the phenomenon persists – and nowhere more so than in the most sought-after sectors of finance.
My research on private equity, real estate and venture capital firms shows that the percentage of female senior investment professionals in those sectors is stuck in the single digits.
That’s true even though women account for 35 to 40% of business school graduates and express the same degree of interest in finance careers that men do when they start their programs.
I compiled detailed employment data on 283 US and European private investment firms, primarily by studying their websites and other public information.
I counted up male and female employees, determined the number of men and women in each function, and looked at each person’s title to determine his or her role. The proportion of women firm-wide ranged from 17 to 23%, and they were overwhelmingly found in marketing, human resources and other support functions.
Almost 60% of the firms I studied had no female senior investment professionals at all.
This matters, of course, on more than one count. Those who “touch the money” typically earn the most and run the firm. And studies show that having a critical mass of women in top decision-making roles enhances corporate performance.
What’s responsible for the underrepresentation, and how can it be addressed? The answers to both questions probably lie in a mix of company culture, business school emphasis, investor awareness and attitudes of women themselves. And given the paucity of women in junior investment roles – the studywide average was 14% – change is not just a matter of time. It will come about only with active efforts from all parties.
Nori Gerardo Lietz is a partner at Arete Capital and a senior lecturer at Harvard Business School.