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Alternative Market Briefing

Gender diverse private equity investment committees significantly outperform all-male teams, study shows

Monday, June 24, 2019

Bailey McCann, Opalesque New York:

New research on private equity shows that having gender diverse investment committees is not only a blindingly obvious thing we need to do in 2019, it's also good for business. The report, entitled, "Impact of Gender Diversity on Performance of Private Equity Investments" from HEC Paris Professor Oliver Gottschalg and MVision, shows that private equity firms that have gender diverse investment committees not only outperform they also have a significantly lower number of failed deals than all-male teams.

The study is the first of its kind examining performance on a deal by deal basis.

Gottschalg analyzed nearly 2,500 completed private equity transactions in North American and Europe for gender breakdown and overall deal performance. According to Gottschalg, the number of women-led deals is under 15 percent. What's notable is that when women are on the deal team, those transactions generate 7 percent more alpha, a 12 percent higher IRR and .52x more total value to paid-in multiple. Gender diverse investment committees also had a failed deal rate that was 8 percent lower than all-male teams.

In the study, an investment committee was considered gender diverse if it had at least one woman on the team.

"What we see from the findings is that in real hard dollar performance terms having women on the committee is significant," Gottschalg said in an interview with Opalesque. "The data also confirms other research already ......................

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