SAN FRANCISCO, CA / ACCESSWIRE / November 4, 2022 / As private equity (PE) firms continue to grow in size and influence, they can play an increasingly significant role in promoting gender and racial equality across the business community. Through strategic global investment of nearly $4 trillion in assets, PE is uniquely positioned to effect change on a large scale.
“In North America alone, private equity firms back nearly 19,000 companies,” said John DeLoche, Co-Founder and Managing Partner of a leading San Francisco-based tech buyout and growth equity firm, Invictus Growth Partners. “When we choose to invest in businesses that promote diversity and inclusion, we signal not only expertise worth supporting, but also company values that prioritize workplace culture and diversity.”
Invictus is a majority minority-owned firm built on the tenets of representation, collaboration, and communication that attracts best-in-class talent and partners with world-class founders. With more than 20 years of experience in the field, John DeLoche recognizes that it’s not just employees, but boards and management teams that benefit from varying ideas and perspectives. And those benefits can have a significant business impact – diverse leadership has been proven to help firms raise capital, improve performance, and reduce risk in private equity portfolios.
“Inclusivity makes for better discussions and smarter business decisions,” states Heather Brien, Partner and Head of Operations atInvictus. Research shows that companies with diverse leadership perform better than the industry average-when applied to private equity, firms have the potential to create more value creation for their portfolios.
For PE firms looking to ensure their portfolio is committed to diversity and expand their own diversity practices in the workplace, John DeLoche shares three small steps that can make a big difference:
- Share with Consistency. Make sure your diversity statement and any diversity initiatives are clear on your website and regularly shared on owned company channels. Show that your values are inherent in the day-to-day operation of your company, not a cause you champion on relevant holidays.
- Make it Measurable. Establishing an internal Diversity, Equity & Inclusion (DE&I) Council will help set goals, develop important metrics, and monitor progress for both the organization and portfolio companies.
- Lead by Example. As career investors, the market routinely looks to us for guidance. If you’re truly invested in equality, make sure your firm reflects that internally and advise Boards on both the performative and reputational benefits of an inclusive team.
“Diversity is one of the core values within Invictus as we believe diverse perspectives around the table lead to operating excellence. There is more data pointing to how DEI initiatives can improve a company’s operating performance, PE needs to put more intentionality behind recruiting and retention practices that create not just meaningful cultures, but meaningful results as well,” stated William Nettles, Co-Founder and Managing Partner of Invictus.
When asset management professionals expand the viewpoints and backgrounds that inform their investment approach, they set a powerful and successful example for other firms – in their industry and beyond.