20 April, 2020

Diversity and inclusion

Diversity and inclusion is one of AP6’s focus areas within the broad approach to ESG. Besides efforts to improve diversity within AP6 (e.g. by requiring more diverse lists of candidates in recruitment processes), AP6 also strives to improve diversity and inclusion in portfolio holdings. Since 2016, diversity and inclusion are part of the evaluation when reviewing and monitoring investments. It involves asking questions (both pre investment and after aquisition) on what is being done to increase diversity in funds and portfolio companies. The AP6 Board of Directors has also formulated specific targets for diversity and inclusion in the portfolio.

For the first time, AP6 is disclosing data on gender diversity of investment teams and partners in the funds that AP6 has invested in. Overall information is also provided on whether the funds are working to increase diversity in their portfolio companies and and reporting diversity data to investors. Hopefully, results will improve over time. There are already clear indications that funds and portfolio companies are striving to increase diversity. There is awareness that diversity increases attractiveness to younger generations and contributes to better decisions and results in the long term. Funds that have actively worked to increase gender diversity in their organizations are starting to see result.

 

Three advocates for diversity and inclusion in private equity.
Emma Watford, (Bridgepoint) shared insights and reflections together with Kara Helander (Carlyle Group) and Julie Richardson (SVB Capital). Photograph: Johan Olsson.

Round table discussions on gender equality and diversity

For the third year, AP6 organized round table discussions on diversity and inclusion in the private equity sector. In total, 33 representatives from 20 Nordic, European and US private equity funds participated. The aim was to share experiences of what is actually being done to improve diversity and inclusion, along with the concrete results of such efforts. The seminar provided a forum for participants to learn and gain inspiration from each other. Some of the conclusions were that diversity and inclusion are now considered to be key success factors for recruiting and competitiveness. Several private equity funds are also now able to demonstrate that the gender balance in their investment teams has improved. Their recipe for success has been a clear formulation of intentions and goals by management, along with implementing scientifically based methods. Examples include involving skeptics in the process, making all recruiting and personnel policies gender-neutral and inclusive, allocating work systematically and avoiding voluntary hand-raising for various tasks. Sharing experiences and knowledge is a way of joining forces and identifying ways of making the private equity industry more attractive to employees with differ backgrounds and skills.