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Even as women make dramatic strides in politics, sports, the law, and other professions long dominated almost exclusively by men, far too many remain locked out of an industry that arguably shapes American society more than any other: financial services.
Whether it’s investment banking, private equity (PE) or hedge funds, financial institutions have the ability to provide the economic backing that individual entrepreneurs, small businesses, corporations and entire communities often desperately need to get off the ground, prosper or just survive.
Given the enormous power and wealth that these institutions possess, it is imperative that their ranks be represented by a diversity of voices that can articulate and advance the interests of those who often don’t have a seat at the table, especially on Wall Street.
But as countless studies have shown, that’s simply not the case. Consider the findings from a 2019 report by Harvard University and Bella Research Group that was commissioned by the nonprofit The John S. and James L. Knight Foundation. The report took a hard look at the composition of individuals in the private equity industry. What it found was as dispiriting as it was striking: only 5.2% of PE firms are women-owned, and they manage just 3.4% of industry assets.
The consequence of this glaring imbalance is easy enough to predict. As Kristin Hull, the founder and CEO of Nia Impact Capital, recently put it, “If we do the math, that means men are choosing the companies for 98% of our economy and look where we are.”
“The mess we're in,” Hull continued, “was literally man-made, and until we can shift that lens to bring in more diversity, we're not going to get out of the problems we're in."
Which brings us to a major leadership decision recently made by Vista Equity Partners, a powerhouse private investment firm founded by Chairman and CEO Robert F. Smith, an African American entrepreneur and philanthropist who advocates for workforce diversity.
In late March, Vista appointed Rachel Arnold to co-head Vista’s Endeavor Fund with current co-head René Stewart. The significance was not lost on Stewart, who said in a Vista statement, “Rachel helped launch the Endeavor Fund, and it is a privilege to now partner with her to co-lead one of the world’s largest tech buyout funds led exclusively by women.”
Arnold and Stewart are in good company at Vista. Indeed, the firm counts among its leaders a legion of women who are driving decisions about where Vista makes its next investments. In fact, roughly 23% of its senior staff are female leaders, and two out of six funds are co-led by women, according to a Private Equity International article about Vista’s diversity development programs.
This is no ordinary private equity fund. Vista has more than $73 billion under asset management, meaning it has the genuine ability to decide winners and losers in the marketplace. For its part, the Endeavor Fund focuses on tech companies with high growth potential.
In all, Arnold and Stewart are the gatekeepers to over $1.4 billion in assets that could make the difference between the success or failure of any institution in need of capital.
But Vista’s track record on diversity hardly ends there. The firm sponsors internships and other training programs for those who have been traditionally underrepresented in the finance industry, including African Americans and Latinx.
Vista has also been a major force supporting the Thirty Percent Coalition, an organization whose mission is to advocate for diversity on corporate boards, promoting women and people of color.
Vista is not alone in the effort to bring a diversity of voices to the financial services industry. But given that high finance remains a bastion of white male privilege, it’s crucial that others on Wall Street follow Vista’s lead.
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Dr. Julianne Malveaux served as the president of Bennett College, a historically Black school for women, from 2007 to 2012. She currently sits on the board of the Economic Policy Institute.
