Reuters: The M&A Game in a Man’s World

NEW YORK–At nearly every private equity, M&A or investment banking conference one thing remains constant — the majority of speakers in crisp gray suits sitting up on stage are men.

That doesn’t seem to be changing. The number of women in senior levels of finance have been shrinking in recent years and businesswomen say they still overwhelmingly feel a glass ceiling exists.

“It always surprises me that there are so few senior women in M&A,” said Mary Anne Citrino, a senior managing director at Blackstone, and a relative rarity sitting at the higher echelons of the male-dominated M&A world.

Citrino, who has an MBA from Harvard Business School and has advised companies such as Procter & Gamble, Kraft Foods and Nestle said it is a harder climb to reach and stay at the top for women.

“If you are going to be a woman and you are going to have a career, even for a man, it’s really important that you adore what you do,” said Citrino, speaking at the Reuters Global M&A Summit in New York last week. “Because when you get that call and you have to be away and you miss that birthday party, at least it’s because you are doing something that you are really passionate about.”

Women made up just 15.3 percent of executive and senior level managers in the U.S. investment banking and securities dealing industries in 2009, according to Catalyst, an organization which aims to expand opportunities for women.

That was down from 16.4 percent in 2008 and 17.8 percent in 2007. Catalyst based the calculations on U.S. Equal Employment Opportunity Commission numbers. Figures for 2010 were not yet available.

Women finance executives, moreover, remain concerned the so-called glass ceiling prevents them from progressing. According to a 2011 survey by Treasury & Risk magazine, 83 percent of female finance executives see an invisible barrier in corporate America that prevents their advancement to the top, only slightly fewer than the 88 percent in a similar survey in 2006.

M&A and private equity are industries that particularly require long hours, continual changes to schedules and international travel. While the toll on life can be hard, the salaries can be huge.

“There are a lot of very qualified, top-tier women who join the ranks of investment banking, but as they grow more senior the numbers tend to get lower,” said Lee Hanson, a vice chairman at recruitment firm Heidrick & Struggles. “It’s a very demanding job, it is a 24/7 kind of job with a ton of travel.”

“The women who do make it to the very senior levels are some of the very best people we see on the Street as a result,” said Hanson, who specializes in private equity and investment banking. “They’re driven, they’re incredibly good at what they do. I just wish there were more of them.”

The number of women entering finance and accounting in the U.S., one area of recruitment for M&A, is lower than men, with 14 percent of female 2010 business school graduates going to those sectors versus 23 percent of men, according to figures from the Graduate Management Admission Council.

“We have never lost a woman managing director,” said Jeffrey Buckalew, investment bank Greenhill’s head of North American corporate advisory. “So I don’t think it’s a function of people coming in and not liking what they do or not feeling comfortable in the organization. Recruitment is what starts all of it, and the pipeline is just small.”

If deciding to go into finance is tough, the choices made later on become even harder.

“The critical issue is at that senior level what choices are they having to make, for their family, for their personal lives and for their professional lives,” said Elissa Sangster, Executive Director at the Forte Foundation, a consortium of corporations and business schools that aims to increase the number of women business leaders.

“I think women … maybe weigh their choices more than men do,” said Sangster in a telephone interview. “If companies don’t take that into account they will lose those women.”

Women clearly have a disadvantage in that if they want children, they have to take time off. That’s hard to do while proving to a demanding boss they can return to their job to work punishing and unpredictable hours.

“It’s hard to get through the years when you are raising children — when you get a phone call, ‘get on a plane in two hours’ and oh well, it’s my six-year-old’s birthday party,” said Citrino. “Guys can get away with that somehow.”

That is borne out by the smaller number of women who make it to top positions in companies. Research from Catalyst Inc dated March 2011 shows only 2.2 percent of Fortune 500 company CEO positions are held by women.

Wall Street investment banks have faced regular lawsuits about a pervasive anti-female atmosphere. In July 2004, in a case involving bond trader Allison Schieffelin, Morgan Stanley agreed to pay $54 million to settle charges it denied raises and promotions to hundreds of women, paid them less than men and subjected them to lewd behavior.

In another well-known case, brokerage Smith Barney settled accusations in the late 1990s by women who alleged that men harassed them with fraternity-house antics in the “Boom-Boom Room,” a basement space in a Smith Barney branch in Garden City, New York.

Sangster said that banks in particular are extremely focused on hiring and keeping more women.

“I don’t think its lip service, at least the companies we work with feel very strongly about the value of diversity,” she said. “Not only that it’s just good for business in the way it looks, but (for) diversity of thought. Having the best and brightest means the best and brightest women as well as men.”

Mark Epley from Nomura Holdings pointed to his bank’s recent announcement that it named Junko Nakagawa as its first female chief financial officer. Morgan Stanley also has a female CFO, Ruth Porat.

“I think it’s a reasonably hot topic on the sellside of Wall Street to try to integrate more women leaders,” said Epley, speaking at the Reuters Global M&A Summit last week.

Gender, sexual and racial diversity are hot-button issues for banks that seek to present a well-rounded corporate image to their clients.

Seth Waugh, CEO of Deutsche Bank Americas, said diversity is good business. “It’s our firm belief that all types of diversity make complete economic sense and best serve our shareholders in the long run,” said Waugh. “It allows us to attract the best and the brightest … which the last time I checked is a broader universe than just Anglo-Saxon straight men.”

Waugh was speaking at a recent event called Out on the Street, hosted by Deutsche Bank which focused on recruitment and retention of gay and lesbian bankers.

Bankers agreed that much needs to be done to improve diversity and more gender equality in senior financial roles.

“I think it’s probably quite low marks overall for Wall Street but something that’s really important to solve longer term,” said Guy Phillips, global head of consumer products and retail group at UBS.

There can be, arguably, advantages to hiring women over men. Working in the aggressive, fast-pace field of M&A requires an understanding of a CEO’s reasons for wanting to strike a deal, such as feeling under pressure because their company isn’t showing sufficient growth, said Citrino.

“It’s not at the end of the day about the numbers,” said Citrino. “And I think women tend to be better reading those dynamics than men do.”

(By Megan Davies and Paritosh Bansal)