Diversity in Private Equity: A Need for Change

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“PE firms should encourage and enable their portfolio companies to invest in high-priority DEI initiatives that will enable…an inclusive culture while outperforming their peers.”

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There is a substantial need for greater diversity in private equity. Fortunately, despite being long-dominated by white men, there is still time for the industry to change.

“PE firms should encourage and enable their portfolio companies to invest in high-priority DEI initiatives that will enable…an inclusive culture while outperforming their peers.”

A recent Boston Consulting Group (BCG) study compares the DEI progress among private-equity-owned companies and publicly traded companies. The bad news – portfolio companies (as well as PE firms themselves) are falling behind public companies in DEI. The good news – PE firms that implement DEI programs outperform publicly traded companies with similar initiatives.

Private-equity-owned firms employed nearly 9 million people and made up roughly 5% of the nation’s GDP in 2019. This provides PE an opportunity to lead within the DEI field. Diversity in private equity can and will improve.

BCG suggests four “no regret” strategies: inclusive policies, career transparency, work-life solutions, and holistic wellness. Strategies like these have proven to increase innovation and resilience within companies, ultimately benefitting financial performances.

However, adopting new programs and strategies is easier said than done, particularly if PE firms haven’t taken their first step into the DEI ecosystem. ideascape meets members wherever they are in the process and works with you to Build Tomorrow Better. Reach out to Jonathan Dyke and Deon Gaines today to learn more.

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