Post-Private Equity Career Paths For Female Investment Professionals

In recent years, we have witnessed a significant increase in female professionals starting careers as private equity investment professionals. However, many have left the private equity industry after only a few years. This article explores why female investment professionals leave private equity careers, and the industries and roles they transition into.

Why female professionals leave private equity

There are several reasons why female professionals leave the private equity industry. Our analyses yielded five main factors:

1. Intense working hours: Private equity demands a relentless dedication to the job, with long working hours being the norm. For many female professionals, this work schedule often clashes with their desire for work-life balance.
   
   
2. Incompatibility with family life: Balancing the demands of a thriving private equity career with the responsibilities of family life presents a considerable challenge for female professionals.
   
   
3. Poor corporate culture: A challenging or even toxic corporate culture can be a significant deterrent for talented female professionals in private equity. Instances of gender bias, discrimination, and lack of support can create a hostile environment that hinders professional growth and diminishes job satisfaction. The absence of inclusive policies and mentorship opportunities further contribute to the erosion of female talent in the industry.
   
   
4. Lack of proximity to portfolio companies: Investment professionals expect challenging, hands-on, and dynamic work with portfolio companies. Regrettably, the demands of day-to-day business operations and fund strategy hinder their ability to establish the desired proximity to portfolio companies. The lack of entrepreneurial latitude inhibits the development opportunities that many female investment professionals wish for.
   
   
5. Diverging interests: As female professionals continue to explore diverse career paths, it becomes evident that private equity does not always align with their professional aspirations. Some female professionals are drawn to industries that offer a greater sense of purpose.

Where female professionals head after private equity

While paths out of the private equity industry can be manifold, female professionals often transition into one of the following five groups:

Group 1 – Banking, consulting, and the big 4

Transitioning into banking, consulting, or one of the big 4 accounting firms is common for female professionals after private equity (see Figure 1). The analytical and financial nature of these industries aligns well with the skills needed and developed in private equity. Additionally, consulting and the big 4 accounting firms have more advanced policies and frameworks around an inclusive work place, resulting in more flexible working hours, extended parental leave opportunities, and more.

Group 2 – Smaller firms or portfolio companies

Female professionals who want to stay close to the private equity industry and appreciate the nature of the work opt to join smaller firms (e.g., mid-cap or small-cap) or other investment vehicles that offer a more flexible and inclusive culture. Alternatively, some female professionals join the management teams at portfolio companies, where they can continue to have a highly demanding role, but with more flexibility.

Group 3 – Corporate environment

A considerable number of female professionals join corporate environments as business development, finance, controlling, or operational professionals. Corporate settings often offer a more work-life balance and well-defined parental leave policies.

Group 4 – Self-employed advisory and consulting

For some female professionals, the allure of self-employment is strong. They seek autonomy and independence in their careers, which may not be fully achievable within the sometimes hierarchical structures of private equity firms. As self-employed advisors or singular investors, these female professionals can tailor their work to their preferences.

Group 5 – Educational pursuits, sabbaticals, and radical career changes

A small percentage of female professionals temporarily leave the private equity industry to pursue further education or take a sabbatical for personal development. Some undertake radical career changes apart from finance (e.g., engineering, physics, computer science, medicine) and pursue a career that aligns with their educational trajectory (e.g., medical doctor, researcher).

Conclusion

Female professionals primarily leave the private equity industry because of the environment, as well as the work content. Regarding the environment, private equity firms can take tangible actions to address the long and unpredictable working hours, incompatibility of a private equity career with family life, and poor corporate culture. Doing so should be taken seriously to keep female professionals on board.

Authors

• Nadine Mensdorf; leads executive searches for private equity funds, she is based in Frankfurt.
• Daniela Nienstedt; heads the Financial Services Sector in Germany, she is based in Frankfurt.