Emily Clark: Thank you for taking the time to speak with me, Gurps. I know that the diversity and inclusion agenda has been very important to you during your time at the BVCA, so could I start by asking what the data tell us about diversity and inclusion in the private equity and venture capital industry?
Gurpreet Manku: Great question to start with as we at the BVCA have focused on research, along with our colleagues at Level 20, Diversity VC and the British Business Bank. As well as providing GPs and LPs with comparator information, we can assess how the industry overall is changing over time.
Looking at recent UK reports:
- 10% of senior investment professionals are women, and across all roles this rises to 15%. Women made up 38% of the workforce and the hope is that a higher proportion of women progress into senior roles to reach the Level 20 industry target of 20% (source). This data was published by Level 20 and the BVCA in 2021 and an update is expected soon.
- The same report was the first of its kind to collect ethnicity data. Representation at senior levels regardless of gender was also low: 1% of individuals were Black, 1% Multi-Ethnic, 10% Asian and 5% selected Other (source).
- In 2021, 34% of venture capital deals made by Investing in Women Code signatories were in companies with at least one female founder, compared to an industry average of 24% (source).
- Gender diversity in the largest PE-backed portfolio companies is tracked under the Walker Guidelines. Female representation at the director level was 26% compared to 37% in the FTSE 250 (source).
Emily: Clearly there is plenty of room for improvement. What do you regard as the most important steps that firms should be taking?
Gurpreet Manku: The 2021 Level 20 and BVCA report set out recommendations under the following themes: data and transparency; recruitment and outreach; retention and progression; and culture and inclusion.
All of these areas are important but ultimately firms need an inclusive culture that supports progression of people from different backgrounds. There have been significant improvements in the number of women and people from diverse backgrounds joining the industry, but will they stay and become the senior leaders of tomorrow?
Emily: I know that the BVCA has been doing a lot already to promote diversity, equity and inclusion among its membership – can you tell us which initiatives you are most proud of?
Gurpreet: Personally, the research. We were the best-placed organisation to collect data to help GPs and LPs with their analysis.
2020 was a momentous year and we knew we had to start covering ethnicity given the focus on the Black Lives Matter protests, colonial era statues, etc. A decent number of firms did provide ethnicity data in 2021 and this number has increased in 2023. In December 2022, the FCA also flagged making full use of data insights to inform firms’ strategies (source).
We are still waiting for the FCA’s consultation proposals for D&I but, in our response to their discussion paper, we said that there is a need for more data collection on inclusiveness as well as diversity, agreed that there is a role for multi-year targets, and stressed the importance of well-designed training across all levels of the organisation.
Emily: To what extent do you think investors are focused on DE&I, and is Europe catching up with the US in that regard?
Gurpreet: At the BVCA, we have a significant LP membership and DE&I has been on the agenda for many years. There certainly has been more emphasis in Europe recently and this can be seen by the growth of Level 20’s European chapters. The focus is mostly on gender, as in many European countries it is difficult, if not illegal, to collect data on protected characteristics. In the UK, you can see the regulators are interested in a broader set of characteristics and intersectionality. Social mobility is also attracting more attention in the city.
Emily: More generally, you have played a huge role in so many technical developments during your time at the BVCA. What have been the highlights?
Gurpreet: If you had asked me this question in the earlier part of my decade(!) at the BVCA, I would have highlighted specific areas such as AIFMD implementation in the UK, improvements in reporting by portfolio companies covered by the Walker Guidelines, the development of the Wates principles on corporate governance and many other detailed legal, regulatory and tax issues where we helped to better shape incoming requirements.
More recently, it has been the ability to support the industry during and after seismic events such as the Brexit referendum and the Covid-19 pandemic. This, I don’t think, any of us would have anticipated and as we near the first anniversary of the war in Ukraine, we can see how geopolitical tensions are affecting our legislative environment.
It has been a pleasure to work with the industry on D&I initiatives, the evolving ESG agenda and transition to net zero, and it is satisfying to finally see some progress on work to access DC pension schemes.
All of this has only been possible with the support of BVCA members, including advisors such as yourselves, and the BVCA team. The ultimate highlight has been working with such an energetic, solutions-orientated and dedicated private equity and venture capital community. I look forward to continuing to work with the industry at Level 20.
Emily: And how are you feeling about taking the helm at Level 20? Clearly a hugely important job, but what excites you most about it?
Gupreet: Level 20 is brilliantly supported by the private equity industry and has grown so much under its current leadership. The business is having a real impact and I'm looking forward to working with private equity firms to help them achieve their diversity goals.
Emily: Thank you so much, Gurps. Congratulations on your new role and thank you for everything you have done for the industry during your time at the BVCA.
