Increased Diversity Present Among SMB Investment Teams

A recent research study revealed that the investment teams of small business investment companies (SBICs) show greater gender diversity compared to the broader private equity investment community.

The study was conducted by Pepperdine University Graziadio School of Business and Management associate dean John K. Paglia, PhD, MBA, in concert with David T. Robinson, professor of finance, Duke University Fuqua School of Business, on behalf of the Federal Research Division of the Library of Congress.

According to the data, only 7.9 percent of venture capital and private equity firms surveyed have female investment professionals on staff, while 11.9 percent of SBIC firms confirmed having women on their investment teams.

The Library of Congress – Federal Research Division Measuring Representation in the SBIC Program report also showed that 10.2 percent of SBICs have at least one ethnic or racial minority on their investment teams.

The data confirmed that roughly 19 percent of the investments made by racially diverse SBICs are to businesses that are minority-led and minority-owned as well as women-led and women-owned, while only 13 percent of the investments made by non-racially diverse SBICs go to such companies.

There is no evidence that gender or racially diverse SBICs perform better or worse than white-male-only-managed SBICs, but racially or gender-diverse funds tend to be smaller while the firms are beginning to invest more.

Earlier this year, PayPal made its demographic information public for the first time.

The payments company released diversity data for its 18,000 employees as part of the company’s ongoing mission to build an inclusive and diverse culture.

“As part of our commitment to being inclusive, we are building a work environment that reflects the world we live in and celebrates the incredible variety of experiences, capabilities, talents, backgrounds and interests of our employees who shape our culture, build our products and services, and work every day to make moving and managing money easier, safer and more convenient for millions of customers around the globe,” PayPal CEO Dan Schulman said in a blog post.

According to the initial data, PayPal has an overall strong gender balance across its global workforce, with 56 percent male and 44 percent female employees. PayPal employees represent 119 nationalities, located in 56 offices across 31 countries.