It will come as a shock to almost no one that the private equity real estate industry is dominated by men. One need look no further than the attendance at one of our PERE Forums or any other industry trade show to see that men substantially outnumber women at these events, which are but small samplings of the overall industry.

Up until now, the evidence has been purely anecdotal. No one had cared enough to quantify the extent of the problem, or even to acknowledge that a problem existed at all.

Nori Gerardo Lietz, one of the most respected and outspoken women in private equity real estate. In compiling a new research paper on the subject, she has put cold, hard figures on the vast underrepresentation of women in investment and finance roles in the private markets.

The report, “Cloistered in the Pink Ghetto: Women in Private Equity, Real Estate and Venture Capital,” looks at the staffing makeup of 283 investment firms, including 82 in real estate. As it turns out, women at real estate firms fared the worst, making up a paltry 4 percent of senior investment professionals, compared to a slightly better 6 percent in private equity and a still meager 9 percent at venture capital firms.

Not only does the real estate sector have the lowest overall percentage of women in senior investment roles, it also has the highest percentage of firms without any women in senior finance roles. Of the 26 global real estate managers the paper cited, 18 had no women at all in senior finance positions.

Given those figures, how does the private equity real estate industry delude itself into thinking it is an employer of women? Simple, it pads its statistics with hires in support and marketing roles. Indeed, this ‘pink ghetto’, as Lietz terms it, has an average female representation of 40 percent for support roles and 53 percent for marketing roles. Together, these two more junior roles boost a firm’s overall statistics for women, represent an average of 61 percent of the total count.

Lietz wisely has avoided oversimplifying the gender disparity issue in her report by not placing all of the blame on the firms themselves. While general partners are held most accountable for setting up the hiring, retention and promotion practices that have shut out women from senior roles, she also pointed a finger at investors, who have turned a blind eye to the gender disparity at these firm, and business schools, which have allowed firms to recruit on campus without calling their employment practices into question.

Of course, women at private equity real estate firms is just one aspect of the diversity issue. When was the last time you saw a person of color – man or woman – representing one of these firms at an industry event? If you do recall seeing or meeting such a person, do you only remember them because they stuck out like a sore thumb amid the industry’s sea of white?

Obviously, there is no research paper to quantify the underrepresentation of Blacks and Hispanics at private equity real estate firm. If there were, however, I suspect the percentages would be even smaller, if that seems possible, as there would be no ‘pink ghetto’ to boost a firm’s overall percentage.

All that said, the private equity real estate industry is no stranger to adapting to change. Indeed, it currently is adjusting to a new world order with regard to regulation, fundraising and investment. If it can deal with such a massive upheaval of its basic operational practices, then it should be able to adjust its recruitment and training practices to better reflect the diversity in the greater business world and the world at large.
Still, no one expects diversity to happen overnight. When it comes to creating change at these firms, raising awareness is the first step. Getting others to speak up –and speak out – is the next one.