From Mergers & Acquisitions
Article by Elina Tarkazikis
“There is this idea in sociology: You’ve got to see it to be it,” said NBC News correspondent Stephanie Ruhle about the importance of building communities of women in the financial services sector, where they are woefully underrepresented. She spoke at the second annual Exponent Exchange, hosted by Exponent Women, a group devoted to nurturing the financial services careers of its female members. “When you enter any sort of room, when you see people who look like you, and sound like you, sometimes you think, ‘I could be really good at this.'”
Before she turned her talents to journalism, Ruhle began her career at Credit Suisse, where she was the highest-producing credit derivatives salesperson in the U.S., and then moved onto Deutsche Bank, where she served as a managing director in global markets senior relationship management. Today, she anchors MSNBC Live with Stephanie Ruhle and MSNBC Live with Velshi & Ruhle.
“The fact that you have an organization that’s actually built on building relationships that will then transfer into dealmaking, that’s extraordinary,” Ruhle commented about Exponent Women. “That is so far from the ‘pink ghetto’ of girls talking about girls, talking about work, and life and balance.”
The event highlighted many of the ways in which women are gaining power in dealmaking. Panels featured investors, including Huron Capital partner Gretchen Perkins and StarVest Partners co-founder Laura Sachar.
“Women need to build our own networks. They aren’t automatic like they are for men,” said Courtney Stapleton, partner at Bliss Integrated Communication and a founding member of Exponent Women.
Trish Costello, founder and CEO of Portfolia, built a business with exactly this in mind. Portfolia is a dealmaking process for women and entrepreneurs that allows investors to help call the shots on companies and products they’d like to see enter the marketplace.
“We have to take venture capital, shake it all up, turn it upside down, and create models that work for women. And by the way, we own half the wealth in the United States,” said Costello. “For the first time ever in recorded history, we are powerful if we choose to use it. So let’s do that — let’s use our financial power to get the companies we want.”
The proof exists; when women are included in the investment decision-making process, business is better. Venture capital and private equity funds with gender-balanced teams outperform their homogenous peers by 10 percent to 20 percent, according to International Finance Corporation. And companies with gender-diverse leadership teams that receive private equity funding outpace others by 25 percent, according to Pacific Corporate Group.
Gender-diverse PE investment committees outperformed all-male investment committees substantially, found a recent study by Oliver Gottschalg, a professor at HEC Paris. The results are compelling: Gender-diverse PE investment committees outperformed all-male investment committees substantially, as measured by several metrics: 7 percent more alpha; .52x more total value to paid-in multiple; and 12 percent higher internal rate of return. Also impressive: the failure rate of gender-diverse investment committees was 8 percent lower. The findings provide concrete evidence showing the value of including women on deal teams and may help to convince skeptics.
Women still hold just 9.4 percent of senior positions at PE firms globally, found a recent report by HEC Paris. The low representation underscores the importance of projects that feature successful female dealmakers, such as Mergers & Acquisitions’ Most Influential Women in Mid-Market M&A.
“Let’s continue to encourage women to study finance at both undergraduate and graduate levels,” said Gretchen Dahlberg, general counsel at Merrill Corp. “Let’s continue to target and identify women in the hiring process and early in their careers for leadership positions. Let’s continue to support female-centric networking programs, associations and events like today with our time and our efforts.”