Report: Moving Toward Gender Balance in Private Equity and Venture Capital

The International Finance Corporation released a landmark report on March 7, 2019, titled "Moving Toward Gender Balance in Private Equity and Venture Capital," addressing a critical gap in understanding the financial implications of gender diversity in alternative investment management. The study, conducted in collaboration with investment firm RockCreek and management consulting firm Oliver Wyman, with support from the Government of Canada, establishes a direct correlation between gender balance and superior financial returns—a finding with substantial implications for institutional investors and fund managers seeking both performance enhancement and portfolio optimization.

The research draws on extensive empirical evidence, encompassing gender diversity and performance data from over 700 funds and 500 portfolio companies, supplemented by survey responses from more than 500 fund managers and institutional investors, interviews with 50+ gender diversity experts and investors, and detailed case studies of 10+ institutions actively addressing gender imbalance. The most significant finding reveals that funds with gender-balanced senior investment teams—operationally defined as 30-70% female representation at leadership and partner levels—generated 10-20% higher returns than funds dominated by a single gender. This performance differential directly contradicts the notion that diversity initiatives require returns trade-offs, positioning gender balance as a value-creation mechanism rather than a governance compliance requirement.

Current industry composition reveals acute gender underrepresentation across all markets. Globally, women hold only 10% of all senior positions in private equity and venture capital firms. In emerging markets specifically, the disparity is even more pronounced, with women comprising just 12% of leadership positions and 30% of broader investment staff. The report also documents that women-led enterprises receive less than 3% of venture capital funding, indicating a capital allocation gap that extends beyond hiring and promotion to investment decision-making and capital deployment.

The report examines three core questions: the current gender balance status of leadership teams at general partners (capital allocators) and portfolio companies (investees); the underlying causes of gender imbalance; and actionable steps required to achieve meaningful diversity. The research provides fund managers and institutional investors with evidence-based recommendations designed to systematically progress the industry toward gender balance without financial compromise. The findings suggest that achieving gender diversity should be viewed by institutional allocators as a return-enhancement opportunity rather than an ESG or corporate responsibility initiative, fundamentally reframing the business case for gender-balanced investment teams.