Enterprising Women Winter 2021

ACCESS TO CAPITAL by Iris Zhao-Fiorello and Scottie Wardell D uring a keynote speech at the first Private Equity Women’s Summit more than a decade ago, Denise Nappier, then Connecticut State Treasurer, held up a copy of Portfolio magazine which ran a front-page story claiming that only four women were working in the private equity industry. While the world was heading toward a global financial crisis, the private equity industry was facing an arguably equally daunting gender equality crisis: women neither represented well in numbers nor had prominence in private equity. This turned into a call to action for a close-knit group of twelve senior- level women who decided to start an organization dedicated to connecting the senior female decision makers in the industry. The Private Equity Women Investor Network (PEWIN) was established in 2008 with a mission to retain, elevate, and empower senior women in private equity (and thus drive long-term sustainability and success for the industry). For decades, the private equity industry has been severely male dominated, with women currently holding less than 10% of senior investment roles at private equity firms 1 . This is perhaps not surprising in an industry rooted in the “old boys club” culture and where the majority of the decision makers remain male. This stubborn dynamic persists despite the fact that research has found a positive correlation between gender diversity and performance, with gender balanced funds outperforming their unbalanced peers by as much as 20 percent in annual returns 2 . Today, PEWIN is the preeminent organization for senior female private equity investment professionals, growing from a dozen initial members to more than 700 women across North America, Europe, Asia, Middle East and Africa. PEWIN members are all senior executives at their respective firms, including some of the largest private equity power houses and most influential institutional investors globally. Membership is by invitation only to allow for network expansion while maintaining quality. PEWIN provides an intimate forum for female general partners, limited partners and other private equity professionals to network, share investment ideas, explore potential opportunities to invest together, and increase the profile of female industry leaders. PEWIN also provides a network for female Chief Investment Officers (CIOs) and hosts high-profile CIO roundtable events where members gain unprecedented access to this influential group of female capital allocators. PEWIN has developed targeted initiatives across the private equity ecosystem, which it believes is necessary in order to move the industry toward gender balance. The private equity ecosystem, in simple terms, works as follows: limited partners (pension funds, insurance companies, endowments, foundations and family offices) allocate capital to general partners (fund managers) across private equity strategies; fund managers invest in management teams and entrepreneurs, who in turn build companies, create jobs, and contribute to the long-term growth and advancement of our economy. Central to all of this is capital funding. It is the blood that runs through the veins of this ecosystem to allow efficient and effective deployment of resources. Women have been significantly underfunded historically. According to data from Pitchbook, companies solely founded by female entrepreneurs in the U.S. have consistently received less than 3% of the total capital invested in venture-backed startups in the past decade3 (venture capital is a subset of the private equity industry focused on early-stage businesses). Standing behind its belief that ownership leads to decision making power, PEWIN launched Project Pinklight in 2017. Project Pinklight is a program for PEWIN members intended to facilitate the acceleration of new, high potential women- led private equity firms. The program addresses the lack of diversity among founding partners and encourages women to create firms where they can, among other things, establish a culture of inclusion. The program includes a pitch session, during which female fund founders receive feedback on their fundraising pitches from a group of highly experienced limited partners and general partners, and a toolkit to assist them in navigating the intricacies of starting a fund. Project Pinklight specifically focuses on supporting women-led fund managers who occupy a critically influential position in the economy. A private equity firm may be actively managing anywhere from 15 to 50 companies at a time depending on their strategy. Given that female partners invest nearly 2x more in female entrepreneurs than their male peers 2 , a healthy universe of successful women-led fund managers could generate meaningful downstream impact on gender diversity in the broader economy. As is the case for female entrepreneurs, raising capital for female led private equity funds is challenging. According to a recent report by Women in VC, only 5.6% of U.S. venture firms are women- led, and 73% of women-led firms were founded in the last five years 4 . Furthermore, 44% are investing out of their first fund, implying that they will need to fundraise again in 12-24 months 4 . Newer managers, which include the vast majority of women-led fund managers, face the greatest fundraising headwinds in today’s COVID-impacted, politically uncertain environment, and the inability to raise new funds could endanger their existence. PEWIN aims to usher up to ten member firms through its Pinklight accelerator every year. To date, 21 member firms have graduated from the program, raising PEWIN provides leadership for women in the private equity ecosytem 42 enterprising Women

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