Why Private Equity Firms Should Include More Women

In the senior ranks of private equity, men outnumber women by 10 to 1. Gender equality aside, this imbalance also makes poor business sense. That was the starting point of our latest research at HEC Paris, where we examined how gender composition in deal teams affects performance. Our conclusion: teams with at least one woman consistently outperform their all-male counterparts.

We delve into the data and its implications for diversity, leadership, and returns. Across the financial services industry, gender gaps persist, but private equity appears especially resistant. At the board level, PE trails other finance sectors by a 2:1 margin in gender representation.

Women hold just 9.4% of senior roles in private equity. Even more worrying is the trend: the number of women leading deals fell from 5% before 1995 to just 1% between 2006 and 2015. Faced with these numbers, we asked a basic question: does gender diversity make a difference in performance? The answer, according to our findings, is yes - and by a wide margin.

When Ardian’s Lise Fauconnier led the firm’s investment in logistics specialist Staci, it wasn’t just another successful deal. It was an illustration of how mixed-gender teams outperform male-only teams in private equity. With support from MVISION, and through the HEC Private Equity Observatory, we analyzed 2,454 realized deals from 220 funds over 20 years, managed by 51 fund managers.

Using robust indicators like PERACS Alpha, total value to paid-in (TVPI), and internal rate of return (IRR), we measured how gender-diverse teams fared. On average, committees with at least one woman achieved 12% higher IRR and delivered 52 cents more per dollar invested compared to all-male teams.

They also had significantly lower capital loss ratios - 8% to 12% less. Women-led deals were more common in sectors like biotech and IT and were associated with longer holding periods. This may suggest more transformative strategies or simply less premature selling, with teams waiting until full value was created.

To uncover these insights, we partnered with industry leaders and drew on confidential datasets made available by PE firms and advisory groups. Our study is unique in its breadth and depth. Unlike earlier analyses that only hinted at a gender-performance correlation, we provide empirical proof using performance data from a mature, transatlantic market context.

The study relied on inferred gender composition of investment committees, cross-referenced with deal outcomes. The result is the most comprehensive and data-rich exploration to date on how gender affects private equity performance.

We presented our findings at a panel in New York featuring prominent women in the industry. One speaker, Sheryl Schwartz - named one of Mergers & Acquisitions’ “Most Influential Women in Mid-Market M&A” - posed a simple rhetorical question: “With better performance and lower loss rates, why wouldn’t private equity firms put women on deal teams?”

It’s a good question. But the answers are layered. First, women remain underrepresented in business schools and fewer still pursue finance. Then there are structural barriers: long hours, intense competition, and limited flexibility that make work-life balance especially difficult for women. And in many firms, women still have to work harder to earn the same leadership opportunities men receive more readily.

We believe there are solutions. Some involve redesigning job structures to make careers in private equity more compatible with what many women seek. Firms should also systematize inclusion, rather than rely on isolated champions. Importantly, men must become active allies. The career opportunities enjoyed by the high-performing women in our study likely came through male sponsors and mentors. Driving gender diversity is not just about justice - it’s also a matter of financial logic. The evidence supports this.

At HEC Paris, we are working to do our part. In our current CEMS elective on Management Buyouts, 52% of the participants are women. Many have already completed internships in private equity. This suggests that change is coming - and that the next generation of dealmakers may look very different from the last.

Methodology

We analyzed 2,454 realized deals executed over 20 years by 51 fund managers from 220 funds in Europe and North America. Performance was assessed using standard private equity metrics: IRR, PERACS Alpha, TVPI, and loss ratio. Gender composition of investment teams was inferred and analyzed in relation to deal performance.

Applications

These findings have clear implications for private equity firms, limited partners, and educators. Promoting gender diversity in investment committees isn’t just a moral imperative - it leads to better financial outcomes. Firms can drive change by adjusting recruitment, mentorship, and retention practices, while building transparent pathways for women to lead deals.