There is no doubt that significant progress has been made when it comes to embracing diversity and inclusion in private markets asset classes. It is vital to acknowledge, however, that significant challenges remain.

“Our industry, which is fast-paced and results driven, must recognize and appreciate that a more diverse and inclusive culture will not happen overnight,” says Northleaf’s Lauren Harris. “It’s a journey that evolves over time with a need for continuous improvement and buy-in across the firm.”

Brookfield’s Lori Pearson adds: “Initiatives to support greater diversity and inclusion do not end with achieving a specific target – this is an ongoing process to build a stronger organization for the long term. Probably the biggest challenge is maintaining the discipline to integrate a focus on diversity and inclusion into everything we do. For example, this may mean being patient when recruiting to ensure our slate of candidates is diverse.”

There is no doubt that identifying diverse candidates remains challenging for firms. The answer, according to Esther Peiner at Partners Group, is investment. “Not monetary investment, but time,” she says. “Just pick gender diversity as a measurable factor. Typically, less than 10 percent of the applications we receive for investment roles are female. The talent is absolutely out there, but you have to be prepared to embark on a more time-intensive process to keep widening the funnel.”

“It is hard work,” agrees Katherine Jollon Colsher, chief executive of Girls Who Invest. “It’s important that firms put significant resources towards DE&I.”

There are also specific legal and practical challenges that can hinder a DE&I program. Data protection regulations in many markets makes it hard to track certain types of diversity – or even to ask the question. Social and cultural norms around DE&I also differ around the world. Then there is the fact that compensation mechanisms mean that people moves in private markets are relatively uncommon, making it harder to make progress against targets.

Succession events are particularly rare and to really ensure diverse leadership, DE&I needs to be built into planning many years in advance. Wol Kolade of Livingbridge, meanwhile, says key-man clauses – aside from the gender-skewed language – can sometimes make it difficult to remove destructive forces from within a firm. “When we see people not espousing the culture and values we want, we frankly have to remove them,” he says. “But the key-man clause can act against that and is actually a restriction on our ability to effectively manage our firm.”

Peiner says that perception needs to be overcome. “There is still a lack of understanding about what it is that we actually do in infrastructure investment. It involves a lot fewer spreadsheets than people might imagine. We are building projects to success, often with a transformational impact on the society they serve, which is very rewarding. This is a notoriously secretive industry that could greatly benefit from greater transparency.”

“The world is watching,” says Johnathan Medina of Apax. “The world knows there are around 10,000 private equity firms with almost $4 trillion of assets under management. Because of that, we can have an outsized impact on the business community. Until we are genuine about the reasons for our deal teams being 1-2 percent Black, we won’t be able to move the needle.”