‘Funds fostering gender diversity achieve better returns’

In the highly competitive, and often macho, world of private equity, Maite Ballester is undoubtedly a pioneer.

Publicado Thursday, January 23rd 2020
‘Funds fostering gender diversity achieve better returns’

Maite Ballester

Back in the 1990s, she was the first woman recruited by private equity firm 3i in continental Europe. Now, more than two decades later, as the managing partner of Madrid-headquartered private equity fund manager Nexxus Iberia, the trailblazing Ballester is channeling her considerable drive and determination into an initiative that aims to ensure as many women as possible follow in her footsteps.

Ballester is the Spain chair of Level 20, a pan-European initiative that aims to inspire women to “join and succeed in private equity”. Historically, the private equity industry has had an overly tough image that has deterred many women from joining its ranks. “Private equity funds and investment banks are often seen as very aggressive,” acknowledges Ballester.

However, those private equity funds that do seek to develop and encourage the female talent available to them are sure to reap dividends and are likely to be more successful when it comes to keeping investors happy. Ballester’s message is clear: “Diverse management teams and boards drive better returns.”

This is where Level 20 comes in. The goal of the not-for-profit organisation - which has 2,500 members across Europe - is “for women to hold at least 20 per cent of senior positions in private equity”. Unfortunately, statistics show that the private equity industry is some way off this target. Level 20 figures show that only 6 per cent of senior level roles in the private equity industry are occupied by women. It seem clear that – given 15 per cent of mid-level roles in private equity, and 27 per cent of junior level roles, are occupied by women – the industry has a poor record of retaining female talent. And as Ballester makes clear, this loss of talent means returns for investors are not as good as they should be.

More women needed
“There are no differences in skillsets between men and women, and we need more women at junior levels,” says Ballester. “We [Level 20] run mentoring programmes for women and we have a long list of mentor candidates.” And it’s clear that many men recognize the urgency of the need to encourage more women to remain in the private equity industry – 62 per cent of the level 20 mentors in the UK are men. Overall, 125 firms in the industry have provided mentors for the level 20 mentoring programme, in which 287 women are currently taking part.

From a Spain perspective, Ballester says that one of the lost pressing tasks she is currently facing is the need to identify “junior level women in Spain’s private equity industry”. She is supported in this task by the Level 20 Spain committee, which, in addition to Ballester includes: Cristina Badenes (partner, Meridia); Ines Andrade (senior advisor, Altamar), Carmen Alonso (head of Iberia, Tikehau Capital GP); Teresa Breton (investment manager, Axis); Yolanda Falcon (managing partner, Uninvest); Sonia Fernandez (partner, Kibo Ventures); Maite Lacasa (managing partner, MdF Family Partners); Silvia Martin (director of communications, ASCRI); Celia Pérez-Beato (partner, Nazca); and Natividad Sierra (partner, Corpfin Capital). The wide range of representatives on the committee demonstrates the extent of the support for the Level 20 initiative in Spain. Level 20 has received financial backing from 56 firms including: The Carlyle Group, Blackstone, Bridgepoint, CVC Capital Partners and Warburg Pincus.

Private equity funds that ignore the issue of the low proportion of women in their senior level management teams do so at their peril. Increasingly major investors are refusing to do business with funds that are failing to take steps to tackle this problem. Ballester says: “There are big US, UK and Scandinavian pension funds that are only doing business with those that take ESG (environmental, social and governance) factors seriously.” It’s clear that private equity funds need to act now to address this issue.