Boosting diversity and inclusion within Australia’s private capital
investment industry will be fundamental for the sector’s success and future
growth.
While it is well-recognised that companies who have adopted actions and
processes to diversity have benefited from improved decision-making,
increased employee engagement and retention, the case for diversity in the
private capital sector is being driven as much by external influences as
internal.
Investors have increasingly incorporated diversity and inclusion alongside
broader ESG and impact considerations as a vital marker in due diligence
processes. They are driving the need for fund managers to practically
demonstrate improvements to their firm’s diversity and inclusion scorecard.
On a global basis, leading investors have taken decisive steps to publicly
and privately communicate their expectations in this area – managers will
not secure commitments from some investors if they cannot demonstrate a
comprehensive strategy to lift diversity and inclusion within their teams,
and within the portfolio businesses into which they invest.
The Australian Investment Council recently partnered with private capital
advisory firm Help Capital to complete the most comprehensive compilation
and analysis of data about the number of women within the industry, as well
as recruitment pathways into and out of the sector. This report – Women in Private Capital – builds on the on the
Council’s first published data benchmarking exercise in 2018 titled Women in Private Capital – The Case for Change.
Findings in the latest report show that while women in private capital
currently have an attrition rate which is almost double that of men,
progress has been made in improving gender diversity in the industry. This
is particularly noticeable at the junior professional levels where a
compound annual growth rate of 38% was achieved from 2014 to 2019, whereas
for women in senior roles the increase was 13% over the same period. This
may be partly due to the relatively small size of the industry and little
movement at the senior level where this cohort often has a partnership
role.
The analysis also showed that 33% of firms in the private capital industry
have no women in their investment teams. These firms account for 9% of the
total workforce in the domestic industry and it is important to point out
that some of them comprise small teams of 2 or 3 people.
Nonetheless, there is work to be done. The report analysis will help shape
the Council’s Diversity and Inclusion Advisory Committee’s work to bring
greater focus to talent retention strategies to support firms in reversing
the slow and steady loss of female talent at all levels.
This will build on the work the Australian Investment Council has focused
on in recent years to accelerate the pace of change towards a more gender
diverse and inclusive community of professionals across private capital
with initiatives such as:
- Introducing an emerging female leaders mentoring program;
- Publishing and promoting a series of role model case studies showcasing
the career journeys of women in the industry;
- Launching a new Diversity National Award as part of the Councils Annual
Industry Awards; and
- Establishing an industry-wide Champions of Change program.
In the coming weeks, the Council will also introduce a new inclusion
training program for the private capital industry.
The Council recognises that diversity is much broader than gender, and that
it should be embraced in its broadest sense: ‘diversity’ of thinking, of
ideas, and of approach. In the coming months and years, we will continue to
work with the private capital industry to facilitate an environment that
takes into account the many and varied lenses through which growth and
investment opportunities can be achieved.