Some big asset managers such as Bain Capital Credit and Barings — which both count private credit among their large investment offerings — say they are trying address the lack of gender diversity in the industry by putting measures in place to boost women in the early stages of their careers. They also are offering boot camps on credit and alternative assets for college students or establishing support groups for women already in the industry.
Those in the private credit business say the outside pressure is intensifying. "We do see this request more and more," said Cecile Mayer-Levi, head of private debt for European alternative asset manager Tikehau Capital, based in Paris.
New York-based Caspian Capital, which invests in a type of private credit considered distressed debt, earlier this year started a diversity initiative aimed at increasing the ranks of women and minorities. "The events this summer reiterated the urgency and focus," said Kathryn Murtagh, general counsel at the firm. Caspian's staff of two dozen is now more than 40% female, she said.
Meanwhile, alternative investment shop Varde Partners in the past five years has boosted its female investment professional headcount to 22%, from 9%. The Minneapolis-based firm, which invests in corporate debt, including private credit, has overhauled its hiring processes, including how it screens resumes and reviews promotions.
"Investors are increasingly focused on diversity, and rightly holding managers to a higher standard," Varde co-founder Marcia Page said in an email.
This parallels how things have unfolded elsewhere in the campaign for greater gender equity. Corporations, for example, only put more women on boards of directors in response to demands from activists, pressure from big institutional shareholders or legal mandates in state legislation.
The financial industry, long a laggard in hiring women for top management jobs, has also been pressed to elevate more women to top management jobs. Although many of the lower-paid employees in finance are women -- sometimes a majority of the workforce -- the upper ranks remain a male stronghold. It was only last month that one of the U.S.'s biggest banks, Citigroup Inc., broke the gender impasse by naming Wall Street's first female chief executive officer.
The argument that diversity is desirable — but it shouldn't trump performance — may not carry much weight with some institutional investors. More equitable gender balance doesn't mean sacrificing returns, said Dhavni Shah, chief investment officer of the Illinois Municipal Retirement Fund, with $43.1 billion in assets.
There is little hard data on the performance of private credit firms that embrace diversity. But research on the broader $69 trillion asset management industry shows there is no penalty for racial and gender equity, according a study by the Knight Foundation, a journalism think tank.
"It's clear that you can generate strong results and embrace diversity," said Curtis Johnson, managing director of investor relations at Carlyle Group, a Washington-based firm with $50 billion in global credit, including private credit.
What may not be clear is whether private credit gets that message.