Women are leading change in the alternative investment sector

Written by Tom Brown on 22nd Feb 2019

The number of women in senior positions has to be equal to men. That is not a difficult concept, but it is proving hard to achieve. At KPMG, we’ve found that within the alternative investment sector, women are the ones pushing for that change, a tall ask when they are underrepresented in decision making positions in almost every company and sector across the globe.

Among alternative investment professionals, far more men than women believe that enough is being done on diversity. Enough is only being done when we’ve had several generations of actual equality.

In the last year, the alternative investment sector has been handed an open goal thanks to the continued sluggish performance of other asset classes. Money has been flooding in to private equity, property and real estate as investors struggle to meet their performance targets elsewhere.

Within the alternative investment sector, women are the ones pushing for change

But, the good – or rather, bad – times won’t last forever. The alternative sector has to up its game if it wants to remain competitive when we return to more ‘normal’ market conditions. Quite simply, just like an investment portfolio, a diverse business is a better business. And if the sector doesn’t face up to the challenge now, it won’t be fit for the future.

Whilst we know that companies can’t change their employee make-up overnight, there is no excuse for inaction. At KPMG, we took a look at the sector’s attitudes to diversity around the globe to get a sense of whether enough is being done to achieve equality.

Twenty per cent more men than women think enough is being done to tackle gender diversity in alternative investment

One of the most concerning findings of this piece of work is the apparent disconnect between male and female perceptions. Twenty per cent more men than women think enough is being done to tackle the lack of gender diversity in the sector. Further, 65 per cent of men think their company’s leadership takes the issue seriously enough, whilst just half of women have the same belief.

Companies need to make the reality of their diversity gaps apparent to all staff so that there is no doubt of how important it is to their corporate agenda, or over how much progress is being made.

In more welcome news, our study also found that institutional investors are getting on board. Over the next year, 75 per cent of the investors we surveyed said they plan to ask investment teams to report their diversity efforts.

Gender diversity is an ethical and business imperative

Further, more than one third (37 per cent) of the investors surveyed said they will require disclosure of diversity statistics for all potential investments, and 42 per cent said they will require the firms in their portfolios to improve diversity, up from just 11 per cent last year.

Diversity is sometimes dismissed as something of a ‘buzzword’, but, what clearer evidence you need to demonstrate that diversity is a business imperative than this insight from investors?

We are a critical time, geopolitics technology and changing social expectations will all put pressure on the male dominated alternative investment industry. If it wants to maintain anything like its current margins in a decade from now, it needs to take some bold action on introducing diversity of age, thought, ethnicity and gender. It will be the only way to navigate change and appease investors and the wider public.

Gender diversity is an ethical and business imperative. Every leader has to ask themselves, what am I doing to make a change?

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