The South African private equity industry is making significant advances within the area of transformation, a 2019 survey released by the SA Venture Capital Association (Savca) shows.
According to the survey, the percentage of female and black professionals within the industry has increased to 29.6% and 34.9% respectively, up from 21.8% and 29.9% in 2017.
A 2017 Preqin survey showed that, globally, women occupy 9.4% of senior positions at private equity fund managers, and 11.5% of those at venture capital fund managers.
Savca CEO Tanya van Lill notes the improvement in gender equity within the local industry and says women are becoming more aware of the private equity (PE) and venture capital spaces as a career path.
She adds that there has been a large push internationally towards gender diversity in the PE space, and locally “we are increasingly seeing women from investment banking starting their own PE funds”.
However, Cathy Goddard, chief executive of Firebird Fund Managers and a member of the Savca board, points out that there is still a long way to go in reducing salary discrimination among genders.
“If you look at benchmarks, you will find men and women on the same remuneration level but the discrepancies sit in the bonus structures, which are discretionary.”
Goddard says someone starting out in the private equity industry could expect to earn R450 000 a year, moving to R750 000 after three to five years.
“After years of hard work and experience, someone at CEO level in private equity could expect to earn about R2 million to R3 million a year plus bonuses.”
However, she points out that the R3 million annual salary is an unrealistic expectation for anyone still cutting their teeth in the industry.
While more females and black individuals are showing interest in joining the sector, it comes at a time when mentors in the industry are few and far between.
Thiru Pather, investment principal at the SA SME Fund, advises young fund managers to take every opportunity to learn. “You have to put in the time to become more experienced and marketable.
“You need to think about your value-add to the organisation and the industry.”
Firebird’s Goddard is currently closing out a R500 million gender-lens fund in the SME space, which seeks to improve gender equity. “We don’t believe in only investing in women-owned businesses because that would reduce our pipeline. There simply aren’t enough.
“What we’re saying is that in our wake, we will leave women-owned businesses. So, the day we step in, we ask the company to sign up to a five-year programme and understand that we are going to bring women in at ownership level,” she explains.
Savca recently launched a fund manager programme that will kick off in 2020 and is designed to encourage and mentor around 36 first-time fund managers.
Van Lill says the association’s research has highlighted three problem areas for first-time fund managers: fundraising, running out of working capital, and a lack of expertise within the team.
“Most new fund managers have worked on a specific focus area, rather than running a project from end to end.”
Van Lill says the year-long programme will work with eight to 12 companies, which will be able to put forward three candidates each. These candidates will be exposed to workshops, coaching and mentorship throughout the year.