Over the past five years, the Finnish venture capital and private equity industry has seen good progress in gender diversity. The proportion of women in the industry has grown from 14% to 22%. Venture capital has experienced the most progress during this time, overtaking private equity despite starting with a lower representation of women.
Manager roles have seen encouraging trends, with women now comprising nearly 40% of manager positions in Finnish VC and PE funds. This marks a ten-percentage point increase over the past five years.
However, representation at the partner level remains lower, with women accounting for only 15%. While there has been progress at the manager level, the gap in senior positions highlights the need for continued efforts to promote gender equality within the industry.
There is a silver lining in there: Although the proportion of women among partners is still low, the increase in managerial diversity is a good sign, as typically promotion to partner in VC & PE funds is from within the company as staff accumulate years of experience.
In addition to gender, we were mapping professional backgrounds in the teams. All in all, it remains relatively concentrated. Most professionals enter the field with business or technical study backgrounds. Venture capital teams display slightly more diversity in educational paths, while buyout funds are more concentrated in finance and consulting.
A recent review of carry allocation in Finnish VC and PE funds sheds light on how profits are distributed within investment teams. While carry allocation appears relatively equitable between genders when adjusted for roles and responsibilities, fewer women receive carry due to their underrepresentation in senior positions.
The average carry allocation is highest in venture capital funds, at 16%, and lowest in buyout funds, at 10%. Professionals aged 41 to 60 receive the highest average allocations, with only minimal gender differences within this group. The distribution of carry recipients skews younger, with more observations under the age of 50.
Despite these advances, there remains a long road ahead to achieving gender parity in the industry. One in five members of investment teams in Finnish VC and PE funds is a woman, a figure that has nearly doubled over the past five years. While managerial diversity has improved significantly, the underrepresentation of women at the partner level and in carry allocations underscores the ongoing challenges. Continued efforts to promote inclusivity at all levels of the industry, from recruitment to leadership to profit-sharing, will be essential for building a more equitable ecosystem.
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Maria Hyartt
The author is a senior analyst in Tesi’s fund investment team
