Could you start by telling us a bit about your background and your work on improving female representation in the industry?
I have been active in international and emerging markets finance for over 40 years and in private equity since 1993, during which time I have worked with and for many strong and competent women in difficult, male-dominated environments whether it be geographical, cultural, or institutional.
I have managed five international private equity funds of funds and have been an active advisory board member on 18 firms in both emerging markets and developed markets. For the past 10 years I have advised, through Pontefract Global Strategies, private capital firms focused primarily on the frontier emerging markets with an emphasis on social impact investments.
Since 2010, I have mentored many young adults working in the international alternative investment space – mostly young women, as women are more inclined to ask for guidance. Over time they have shared with me their experiences working in this male-dominated culture: frustrations with unintentional bias, discomfort from sexual harassment, and even the trauma of physical assault.
During my career I have advised numerous private equity firms and one of the most important things I tell them is that women can add value to your investment decisions by bringing a different thought process and perspective to the issue at hand. Women are the primary purchasers of many of the products and services produced by companies. So, intuitively it would make sense for these companies to have women in senior management positions, and those firms that invest in those companies would benefit from more women in senior investment positions for their expertise, knowledge, experience, and female perspective.
I have actively encouraged these alternative investment firms to hire more women in investment positions. Most often the managing principals will insist that they are trying but that there are not enough talented women available to hire. Yet, these firms also lack internal policies or a culture that provides intelligent recruitment, retention, promotion, and encouragement for women. There needs to be more conscious and dedicated action to supplement all the talk of good intentions.
You are currently co-chair of the EMPEA Gender Parity Working Group. Can you please explain a little more about your work there?
After speaking with many associations of women in the alternative investment field over the past four years I became convinced that, while they serve an important function in supporting their members, more direct action is required of investment firms. I have been disappointed by the number of organizations that sponsor investment conferences but devote only 45-60 minutes to women’s issues, and always on the afternoon of the last day of the conference with a panel of all women and attendees that are 80% women. We need more concrete, direct action to help investment firms implement their good intentions. And we need senior, experienced men to collaborate with women to make this happen and not leave it to women alone. Hence my encouragement for the launch of the EMPEA Gender Parity Working Group, of which I am now co-chairperson along with Alexis Crusey of LeapFrog.
Our initial discussion focused on identifying the gaps in action toward gender parity. There has been a lot of attention paid to gender-lens investing, that is, investing in companies owned or managed by women, or that focus on products and services for women. But there has been far less attention paid to accelerating gender parity in the investment firms themselves. We also considered a top-down (focus on investment firms) and bottom-up (focus on recruitment of women at business schools to overcome the perception of the male-dominated industry) approach. Thus our work at EMPEA is currently focused on three main areas:
- Researching and presenting evidence to alternative investment fund managers that the greater the representation of senior investment females at these firms, the higher the investment returns they produce. The recent report compiled by the IFC and Oliver Wyman begins to demonstrate this.
- Providing a toolkit or templates of policies and methods to managing principals to help overcome the inertia around doing something different and potentially unfamiliar – recruitment, retention, and promotion. Several organizations are developing such toolkits and our objective is to make them available to the EMPEA membership.
- Developing an independent ratings system to show which firms are doing well at recruiting, retaining, and promoting senior female investment talent. This can then be used to encourage women at business schools that there are indeed some firms that are establishing an internal framework and culture that is supportive of women investment professionals.
What do you think is the biggest challenge for the industry to overcome in the next few years?
Whenever I speak to young women at business schools starting their careers, their reaction is always that the industry is male dominated and that is something that fundamentally needs to change. We need to hear from a lot more men on this matter. It is no good if all this work – research, papers, conferences etc. – only involves women. I am campaigning heavily for more active male involvement. Gender parity means just that: greater equality in the treatment of women and men. But, in the effort to get more women into the alternative investment field, we need to have men working actively alongside. All too often I have found that the investment firms (whose managing partners are most often male) feel that they are helping to move forward the issue if they assign a woman to represent the firm and join the efforts of an association or group that is working on the subject. It is my objective that every firm assigns a man and a woman together from their firm to collaborate on the issue.
At the same time, despite frustrations and difficulties, I am pleased that there is considerably more attention being paid to encourage gender parity in alternative investment firms. It is our objective to accelerate that movement.
This Q&A is part of Preqin’s 2020 series on women in alternatives. Keep an eye out for our upcoming report Women in Alternative Assets and register your interest by emailing Preqin.firstname.lastname@example.org.
In the meantime, you can read our factsheet for the latest statistics.
Jim has over 43 years of investment experience in international and emerging markets, most recently at Pontefract Global Strategies, LLC (PGS), which advises private equity and social impact investment firms in frontier emerging markets on global best practices. Jim is co-chair of the EMPEA Gender Parity Acceleration Working Group which is EMPEA’s first industry initiative aimed at addressing the gender gap in the emerging markets private capital industry. The Working Group plans to leverage the knowledge and experience of the EMPEA membership and lead a collaborative effort to identify the next steps to achieve gender parity and assist its member firms to do so.