By Thembelihle Nyembe and Tamala Amelia Manda
The unemployment rate in South Africa has climbed to yet another record high with the official unemployment rate reaching 34.4% at the peak of the Covid-19 pandemic. Although the pandemic has negatively affected all of society, one way or another, women were particularly worse off with an unemployment rate of 36.8% compared to 32.4% for men.
Unemployment during the pandemic exaggerated the structural inequity in the labour markets between women and men with women being 14% worse off over the same period. The inequity in the labour market is as a result of women being disproportionately concentrated in the job market serving in positions that are most vulnerable to economic shock due to the pandemic. A large proportion of women in the workplace are in sectors such as hospitality, retail, and wholesale trade as well as the arts, recreation, and public administration.
The current economic and unemployment crisis highlights the urgent need to close the gender equality gap in the labour markets for sustainability and prosperity of society. Gender and cultural inclusivity in the workplace is not only a constitutional right in South Africa, but it has been proven that diversity drives innovation and resilience in enterprises which is critical in the complex world we live in.
There have been many initiatives that support equality for women in the workplace but the progress has been slow and conscious action is needed by the public and private sector to create true economic gender inclusivity!
Below we will discuss the role of women in private equity and venture capital, highlighting their personal experiences and further examining the contribution that females make in the private financial market.
Women in Private Equity and Venture Capital
With more than $3 trillion in assets under management, nearly $800 billion of which is allocated to emerging markets, private equity can be a powerful source of financing, especially for innovative entities that do not have access to loans or the capital market. Only about 17.9% of women globally are employed in private equity, with only 9.9% of women occupying senior roles and dropping to a staggering 5.2% occupying board seats. The reasons for this are complex, but include gender stereotyping, unconscious bias, systematic economic barriers and the pressure to choose between family and career. Nkateko Khoza, Partner and Director, and Rochelle Moodley, Senior Executive, at Hlayisani Capital are breaking new ground as they take up senior roles in the Private Equity and Venture Capital industry, changing the perceptions in industry and making a positive difference in the South African investment landscape. Their wealth of experience in investments has been a competitive advantage for the Hlayisani team and is inspiring young talented women professionals to consider their future careers in the industry. Nkateko acknowledges that it has not been an easy journey and emphasizes that it is imperative for women to find a work-life balance to ensure that they do not neglect their families and other personal commitments while trying to establish their careers within the space.
A balance in gender representation at all levels of the organisation serves to broaden perspectives and drive better decision making which ultimately increases returns. Having experienced this personally, Nkateko serving on various large corporation board of directors as one of a few females, has on many occasions found that her contribution brought a different perspective that provided opportunities for women within the industry. Women have contributed significantly towards increased profits in private equity and venture capital globally, as per findings made by the International Finance Corporation stated that gender balanced teams have higher valuations, with increased valuations of 64% compared to 55% for non-gender balanced teams. In addition to this, gender balanced teams have recorded higher returns, 10-20% higher net IRR. The evidence is clear, diversity equals better financial performance, stronger innovation, and higher levels of startup success.
Ms. Claire Harcourt-Cooke, an Investment Analyst at Hlayisani Capital, notes that gender bias in business meetings is still prevalent and often made her feel like an imposter in the room. Claire reflecting on her personal experience in some meetings says: “I have struggled with imposter syndrome. Sometimes I sit in on a meeting or pitch with entrepreneurs and business people looking to work with us and realise that I am the only woman on the call. This feeling is less pronounced in video calls than in-person meetings, but it is always something I notice, subconsciously. There have been times when men have failed to acknowledge me, or introduce themselves to me and this makes me feel invisible. This has led to dealing with emotions and feelings of imposter syndrome because I automatically feel inadequate for the situation and as though I do not belong.”
Interviewing Ms. Rochelle Moodley, Fund Accountant at Hlayisani Capital with 25 years in the industry, she recalls: “I was a member of an industry association of which the chairman was resigning. We had to elect a new Head. The members had decided that it should be one of the committee members as there were significant changes happening in this particular segment of the industry, and much had already been accomplished, and we did not want this work to be in vain. We had two nominees on the table, 1 male and 1 female. Most of the committee members had voted in favour of the female member to be the new head of this Industry Association, but many challenges and hurdles were faced in getting the individual elected. She was highly qualified and had the necessary skills and experience but she had to jump through quite a few hoops before she got the position. In my view the male candidate did not have to do the same thing and this was when this disparity in the financial industry started to become more evident to me. She went on to be one of the best in the industry and a well respected leader and pioneer for this particular segment in the industry helping to shape where it is today.”
Ms. Fadzai Mutare, an intern at Hlayisani Capital, shares her experience specifically in the Private Equity industry; “My experience in the industry has been interesting. I expected this space to be harsh, fast paced and to stifle the voice of women. I quickly realised that it boils down to work culture. I have been privileged to work with funds where there is a progressive work culture. People value my opinion, I can ask questions, I am not made to feel insecure and women have the platform to voice their opinions. This speaks to the shift that is happening within the industry – people are progressive. We may be far from where we should be but we are taking the steps to get there.”
What can be done?
Research indicates that female participation in Private Equity and Venture Capital has grown over the past decade, however, this growth has been slow. The steady growth experienced globally is starting to spill into South Africa. In spite of this, we believe that more action still needs to be taken. Although this is not exhaustive, we think the following actions can make a difference.
- Promoting and mentoring women into senior positions. Companies should strive to create gender diverse environments within their work culture by addressing some of the issues that women face in choosing between their lives and senior positions. Women are stronger advocates for gender diversity in their portfolio companies, this leads to a strong diversity multiplier effect across the macroeconomy.
- Provide women with more access and opportunity to build their careers through internal organisational support structures. This support can be in the form of mentorship, by connecting and offering them with the relevant resources, and providing women with children with support when needed through flexible work arrangements and other support mechanisms.
- Nurturing and actively promoting an organisational culture of gender inclusivity. Organisations need to establish clearly measurable goals and articulated ethical values to improve gender diversity. Senior leadership should confront gender and cultural bias in the organisation to develop an environment of support and tolerance.
- Hold Private Equity and Venture Capital funds accountable. Institutional investors should advocate for gender diversity and further hold Private Equity and Venture Capital companies accountable by enforcing these principles in their due diligence processes. Institutional investors have the power to act together to promote gender diversity as a key metric of the UN Sustainable Development Goals.
