Sexual misconduct and discrimination is a “huge issue” in private capital markets, according to market participants surveyed by business consulting firm Semaphore.
Four-out-of-five professionals in the private capital industry, including those working at private equity firms, fund investors and advisers, said sexual assault, harassment, and gender bias were problems, according to the survey released Friday. Semaphore polled nearly 600 industry participants last month, with venture capitalists representing just under a third of respondents.
Only 15 percent of the professionals surveyed were women. Anonymous comments made by respondents noted a severe lack of female representation among the upper echelons of the industry, as well as a need to hold people in power accountable instead of sweeping these issues under the rug.
“I have had a front row seat,” one respondent commented in the survey. “It is destabilizing, demoralizing, divisive, and completely unacceptable behavior that always ruins a business.”
Another respondent, who identified himself as a male investment banker, wrote that on several occasions he had “seen and heard of women being treated the way I’d expect men in the 1950s to treat them." The banker said that "no matter how old, white, bald, or revenue-generating a managing director is, they should be just as susceptible to punishment as anyone else.”
Still, several noted that sexual misconduct and discrimination was a problem across all industries, with one commentator arguing that “it’s being blown way out of proportion,” as the end result will be that “men will fear doing business with women.” Others considered sexual harassment a generational problem, which would “drastically shift as younger generations age into management positions.”
Founded in 2001, Semaphore is an advisory firm whose business includes stepping in to manage “troubled” hedge funds and private equity funds at the request of limited partners seeking to separate from a general partner that has committed fraud or some other similarly egregious behavior. CEO Mark DiSalvo said Semaphore currently acts as the general partner for 11 active funds.
A wave of sexual misconduct allegations involving celebrities and industry titans have come out since October, when reports of such behavior by filmmaker Harvey Weinstein launched the #MeToo movement on social media. This month, real estate mogul Steve Wynn, 76, resigned as chief executive officer and chairman of Wynn Resorts following a Wall Street Journal report that he allegedly pressured employees to perform sex acts. Wynn told the Journal the claims were “preposterous.”
“In the last couple of weeks, I have found myself the focus of an avalanche of negative publicity,” Wynn said in a February 6 statement. “As I have reflected upon the environment this has created — one in which a rush to judgment takes precedence over everything else, including the facts — I have reached the conclusion I cannot continue to be effective in my current roles.”
Wynn Resorts said the company remains "committed as ever to upholding the highest standards and being an inclusive and supportive employer," adding that more than 40 percent of all Wynn Las Vegas management are women.
Respondents to Semaphore's survey called for hiring more women in senior roles and paying them the same as men, as well as implementing monetary penalties for sexual misconduct and bias. DiSalvo said in a phone interview that “we’re fooling ourselves if we think we can just wait until women percolate up through the system” and that action is needed to address the lack of women in senior management at private capital firms.
“Hire women. Promote women. Work extra hard to get women who are truly qualified and primed for success,” one survey participant wrote. “Very simple — if powerful women are in a room, people do not do that sh*t.”