Investors get tough on diversity - AVCJ Forum

“We had one manager come back with zero females in the private equity firm. Unless they put in place a policy to address the fact that they have no gender diversity within their portfolio and within their firm, we are unlikely to invest with them again,” said Liza McDonald, head of responsible investments at Aware Super.

The Australian superannuation fund manager is in the process of surveying all its GPs and collecting portfolio-level data on gender.

Honda Abou-Jamra, a founding partner at TVM Capital Healthcare, noted studies have found that once an organization achieves 30% gender diversity - regardless of whether males or females are in the majority - decision-making becomes more organic. However, she stressed the importance of cultural diversity as well.

“I can't have a company, let's say, in Vietnam where I have 50% male, 50% female which is great, but they're all from the US or Europe, and you don't have any representation from the local population. My revenue will be lower because I don't understand the local culture,” said Abou-Jamra.

Carmela Mondino, head of ESG and sustainability at Partners Group, added that diversity - in terms of culture as well as gender - must be pursued at all levels of an organization, from the c-suite across different departments, if it is to make a difference.

“What we're telling our companies is that they need to make sure that they represent the markets in which they operate. If you have a marketing team, you need to recruit people who understand how your product resonates locally. You're not just going to get someone who looks like you,” said Mondino.

Abou-Jamra offered the example of a portfolio company whose CEO recruits people according to their nationalities instead of their qualifications. Although it is a common practice in that particular country, TVM stepped in and stopped the practice.

“When we changed that and everybody else didn't, we were able to retain more people. So very quickly. I think the management was convinced that is very good to do that," she said.

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