How to promote gender diversity

Investors believe greater heterogeneity among teams leads to more cognitive diversity, better decisions and superior investment outcomes, says Jennifer Choi, managing director of industry affairs at the Institutional Limited Partners Association.

Jen Choi
Jen Choi

How instrumental has the investor community been in driving gender equality and diversity in private markets?

Investors are in a position to influence managers by raising equality and diversity issues during diligence. We hear nearly every day from managers about the growing number of questionnaires they receive from investors about their team’s diversity, and their organizational policies and practices aimed at building more diverse and inclusive environments. Investors may be in information-gathering mode today, but managers know the time is coming soon when relative performance on DE&I will factor more prominently in institutions’ investment decisions.

How is ILPA shaping the DE&I conversation in the industry?

We have embraced a ‘positive, not punitive’ approach with a focus on providing resources to help investors and managers move along their own DE&I journeys. We introduced DE&I questions in the ILPA DDQ and in our team diversity metrics template in 2018. And our D&I Roadmap and Resources was released in early 2020.

Under the leadership of our Diversity and Inclusion Advisory Council, we recognized we could do more beyond providing resources, to having a point of view around what an authentic commitment to DE&I looks like in practice. The Diversity in Action Initiative is the culmination of that work. It offers a framework for organizations that are already taking concrete actions, spanning intentionality and accountability, talent development and culture, investment strategies and industry engagement.

The Diversity in Action signatories network, launched in December, is a community of private markets leaders shaping the future of DE&I in our industry – 156 organizations have now joined the effort. We meet, virtually, with signatories quarterly to discuss core DE&I challenges and, ultimately, to form recommendations on how the industry can solve them.

What progress is being made across private markets to hire, retain and promote more women?

Various industry surveys indicate that some progress has been made, particularly in hiring more women into junior positions. However, many managers organizations promote from within, so we’ve yet to see meaningful progress in women in more senior investment and leadership positions. Diversity in Action signatories commit to tracking hiring and promotion by gender and by ethnicity, and compiling this data is a critical first step to identifying areas where progress needs to be made.

One area of focus for signatories is understanding the factors that contribute to women poised for more senior roles to leave. Is it about benefits, flexibility, work-life balance, opportunities for advancement or something more intangible around culture? For example, some managers are working to neutralize the stigma around parental leave by encouraging or even mandating such leave, regardless of gender.

What one piece of advice would you give to young women embarking on a career in the private funds market?

Look for places where role models and allies are prominent, where they’re making a real and true effort to not just engage with under-represented groups, but to develop diverse individuals into leaders, and where there’s transparency around opportunities for advancement. And focus on authenticity – stay true to yourself and seek out organizations that invite you to bring your whole self to the workplace.