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How PE can strengthen women’s presence – from a woman on the senior team

By Kapila Ratnam, NewSpring Capital

In an era where women run some of the world’s most successful companies, the numbers in some industries just don’t add up – private equity prominent among them.

We’ve likely all seen the Preqin research that women make up less than 18 percent of the PE industry, with only 9 percent of those women holding senior-executive roles. Once you factor in the percentage of women in accounting, financial and marketing posts, you’re left with just 14 percent of women who are actually PE investors.

Because I believe it is relevant to focus on women who have had positive experiences within the industry, I’d like to reference my experiences at NewSpring Capital in hopes that it will encourage other females in the profession to seek out firms with similar programs and characteristics.

While I can certainly attest to being outnumbered by my male counterparts — whether at board meetings or industry conferences — I have also been presented with opportunities to excel in the private equity community.

As one of two female partners at NewSpring (16 percent of the senior-level team), you might consider my firm ahead of the curve compared with the industry statistics above. But I should mention, however, that I look forward to a time when the number of women in our profession, in general, is not considered news.

At NewSpring, we look to attract talented, results-driven individuals — male and female — and to cultivate our team from within by providing opportunities for growth and advancement. Not a new concept, but NewSpring’s approach to attracting and developing investment professionals is why this strategy has been so successful.

Our investment professionals come from varied backgrounds, not just investment banking or consulting, and we strongly believe that diversity in teams leads to better investments.

To ensure that everyone has certain basic skills essential to succeeding in this industry, we level-set new hires with on-the-job training.

Upon joining NewSpring, analysts enter the firm’s three-year analyst program, which is designed to provide education and practical experience across the firm’s four investment strategies: growth equity, healthcare, buyout, and mezzanine.

Throughout the development track, young investment professionals receive direct training in fundamental investing skills, such as building investment theses and sourcing deals specifically around those theses, in addition to all the usual analytics, diligence and transactional activities, while providing support to the senior deal-team members.

The first year is devoted entirely to business development, which enables all analysts to learn how to evaluate industry sectors, ask insightful questions of management teams, and source deals of interest to the firm. This makes them more effective deal-team members as they progress into investment roles.

In addition to the training, one of the most effective resources is NewSpring’s mentorship program, where senior team members help guide the career paths of younger professionals. Specifically, women in junior roles can benefit from the experiences and insights of senior-level women.

This type of access to senior-level female partners can be invaluable not only to female investment professionals launching their careers but also to experienced professionals looking to join firms with more women partners in place.

With so many PE firms competing for deals, an investment team that brings breadth and depth — not just capital — to the table can be a major selling point to a management team.

Diversity of gender, ethnicity, and domain experience is a quality that helps elevate a private equity firm’s profile in the eyes of any management team. Ample research shows that diversity in deal teams and on company boards leads to better checks and balances and overall investment outcomes.

As private equity investment professionals, our limited partners rely on us to provide best-of-breed investments and best-in-class return multiples.

To deliver on this promise, it is crucial for the PE industry to continue to diversify its deal teams and welcome more women investment professionals, while investing time and resources into seeing them succeed on their paths to senior roles.