Better representation for women in Asian private markets, but glass ceiling persists

Women in private equity tend to hit a glass ceiling at the VP level, with only 2% in Asia Pacific being promoted to principal level compared to 20% of men, according to new McKinsey research.
Better representation for women in Asian private markets, but glass ceiling persists

Asia has more women working in private markets, but the proportion falls with each rung of the corporate ladder, particularly at the principal level, according to a new report by McKinsey. But this might change as Limited Partners (LPs) place more pressure on their general partners.

Overall, Asia Pacific has 26% of private equity investing roles held by women, compared to 23% in the Americas and 21% in Europe, according to the new report titled ‘The state of diversity in global Private Markets: 2022’ published by McKinsey & Company on Tuesday (November 1).

“When we compare Asia to the rest of the world, the number of women in private equity (at the associate level) is 31% versus global numbers, which is at 26%,” said Gary Pinshaw, senior partner and Asia lead of the private equity and principle investors practice at McKinsey & Company

“But there is opportunity for improvement in the significant drop-off that we see as women moved from the VP to principal level. That drop off is significant – much more than what we see in other markets,” he told AsianInvestor.

Women have 40% representation at the VP level at private equity firms in Asia, compared to 29% globally. But that number in Asia drops to just 10% when it comes to the principal level, with only 2% of women being promoted versus 20% of men.

Alexandra Nee,
McKinsey & Company

“The question still is out there, as to whether this is going to be a perpetual problem in Asia? Or is it just the nature of timing where you can wait for the women that are VP to end up becoming principals and managing directors in time?” Alexandra Nee, partner at McKinsey, told AsianInvestor.

The promotion gap is striking, and Nee believes that the “broken rung” at the principal level can be fixed, which will open doors for women to climb further up the ladder.

“It’s that concept of promotion parity,” she said. “Before we get into the promotion room, before you're even discussing a male candidate versus a female candidate for promotion... it has a lot to do with sponsorship, and if a woman has the same number of opportunities to prove herself as her male colleague.”

The conversation about diversity has been buzzing in recent years, as environmental, social and governance (ESG) have become an increasingly important part of investment strategies. Research has also emerged to show that diverse groups can improve performance.


If given the choice of two comparable PE firms, chief investment officers (CIOs) of leading institutional investors said they would allocate twice as much capital to the more gender diverse firm, according to the McKinsey report. More ethnically and racially diverse PE deal teams would receive 2.6 times as much capital.

Gary Pinshaw,
McKinsey & Company

“There's something about the LPs and the role that they play,” Pinshaw said. “With that LP push, I think that actually does create more of a burning platform for private equity. Also, this is a newer industry, where you can define things more appropriately, and you don't have so much legacy. We spoke about how you think about sponsorship, how you think about promotion, how you think about things to prevent attrition. I think that does benefit the industry.”

“On the other side, there is also the question of how you can change the perception of investing in financial services more broadly, at the most senior ranks, as being a 'male game’? So I think that's still something that private equity also needs to work on,” he said.

Asset owners have shown increasing interest in improving diversity within their organisations, their portfolio companies and external managers, although the results have been mixed.

In NZSuper’s annual report released last week (October 31), head of diversity, equity and inclusion (DE&I) Rachael Le Mesurier, laid out motives for its DE&I programme. Despite policies such as public reporting on demographics and gender pay equity, she acknowledged that there was still much work to be done.

“We are concerned, however, about significant underrepresentation of Māori and Pasifika across our workforce and in our decision making. We are acutely aware of the lower numbers of women in leadership positions and the resulting gender pay gap, despite our gender pay equity achievements,” she said in the report.

The mean gender pay gap in 2022 at NZSuper is 17%, compared to 20% in 2018, while the median gender pay gap is 27%, down slightly from 29% in 2018.

Rachel Le Mesurier,

“The size of the gender pay gap is primarily attributable to the predominance of men in senior positions, which is a challenge across the investment sector, both in New Zealand and globally,” Le Mesurier told AsianInvestor.

Women made up 36% of the NZSuper’s investment team, an improvement from 22% in 2018. However, the number of women on the board remained unchanged since 2018 (two out of six).  The sovereign wealth fund added one woman to its female leadership team, bringing the proportion up to 38%, and female heads of teams made up 33% of all team heads.

In response to questions about concrete steps and targets NZSuper has in place to improve gender parity, Le Mesurier said: “Policies such as Flexible Work Practices, Partners Leave and the Primary Carer KiwiSaver Lump Sum Payment (a top-up for unpaid parental leave) help all employees, and particularly women, maintain continuity in their careers and minimise the impact of being out of the workforce for a period as a parent or caregiver.”

“The intersectionality of our approach recognises diversity is wider than gender, so there has been increasing focus on enhancing our culture to support greater inclusion, particularly in our understanding and integration of the world of Māori,” she said.

“The Board and Leadership Team have set clear principles on increasing women in leadership positions... We presently have a female Board chair (our second in succession),” she added.


In general, Pinshaw said that the diversity makeup of investment committees plays a central role in the journey towards gender parity.

“Highlighting the composition is really helpful because, as we know, investment committees are made up of the most senior folks… Investment committees can have this top down impact,” he said. “What are, for example, the proportion of women on the IC, and there will definitely be managing directors, and… that leads to an improvement that can also filter down, especially in that broken rung, principal level.”

“The global average for women at the MD level, right now is 12%. But you see that number shrink when you look at just investment committees globally to 9% women,” Nee chimed in. “And interestingly, our number on racial and ethnic diversity at the MD level – now that includes men and women – is 17%. On investment committees, it's only 9%.”

“Again, these include people of colour, so investment committees are majority white and majority male, meaning that you know for those 12% of women candidates, even though they've made it to the MD level, those women still don't hold the same positions of power as 91% of their male colleagues,” she said.

Both Nee and Pinshaw also highlight the need to simplify and standardise diversity metrics so that every institutional investor asks for the same metrics.

“Currently part of the challenge is that… a private equity firm looking to fundraise is getting different sets of questions from all potential investors and they might say the data request takes too long, so they pick the data that they have available, or simply pick their best numbers,” Nee said.

“If you bring about some form of standardisation in the industry, if you could get the top 10 or 15 firms on board, it will go a long way to getting the industry on board,” Pinshaw added. 


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