IFC’s new report—Moving Toward Gender Balance in Private Equity and Venture Capital.
The report, launched on March 7, 2019 is a collaborative effort of IFC, investment firm RockCreek, and management consulting company Oliver Wyman, with support from the Government of Canada. The study explores the link between financial returns and gender diversity; the lack of women in the private equity and venture capital; and steps needed to achieve gender balance.
Key findings of the report include:
- The lack of gender diversity is acute in emerging markets’ private equity and venture capital. Eleven percent of senior investment professionals in emerging markets private equity and venture capital are women, which is roughly comparable to the 10 percent observed in developed markets. For portfolio companies, emerging market female entrepreneurs receive only about 7 percent of investment capital.
- Gender balance is positively correlated with higher performance. Private equity and venture capital funds with gender-balanced senior investment teams generated 10 percent to 20 percent higher returns compared with funds that have a majority of male or female leaders. Portfolio companies with gender balanced leadership teams have outperformed in median valuation increases by as much as 25 percent than non-diverse teams.
- When women are represented as investors, women-led businesses get more funding. There is a correlation between gender balanced Gender Partners and portfolio company diversity. Only 7% of deals done by male investments partners were in women-led businesses, but for female partners, it was twice as much at 12%.