Private Equity: Still a WASP Old Boys Club?

ke18sb's picture
Rank: Senior Neanderthal | 4,515

Do people think there is what I'd like to call a WASP ceiling for the transition to private equity (I'm a WASP for the record). Throughout the 4 years I spent in middle market banking & private equity, between the people I meet and that hundreds of website I've scanned while checking out fund strategies and criteria, its dawned on me how basically everyone is white, and male for that matter. This has been somewhat puzzling to me seeing as though analysts classes are pretty diverse. Clearly there are some nonwhite kids that get PE jobs, some friends of mine included, however those cases appear to be few and far between. What's the deal? Are my observations off base?

Comments (38)

Apr 22, 2010

Your observations are accurate.

Apr 22, 2010

WASP might be the wrong word, but yes, white males predominantly it seems. Is it fair to assume that some analysts who are part of a minority have a home network (parent's friends, community members etc) with less clout on wall street? Although, I don't know if that network matters as much when you already were on the street and undoubtedly gathered a much larger wall street network...but at the same token parents friends, community members etc are older and were not in the BB the analyst was at, so there's a stronger chance they are in HF/PE and can help?

Apr 22, 2010

Good news for me. :-)

Apr 22, 2010

No. There are definitely asians, indians, etc.

Every now and then a thread like this tells me that people on this board need to realize that this is not the 60s or even early 80s. The Boston Brahmins, the Vanderbilts, the duPonts, et al are pretty insignificant (and relatively poor) families now that we're in the twenty-first century. We're at a point where rich jews can buy their way into what used to be the most exclusive, WASPiest clubs.

Genealogy means nothing now. Look at the richest, most powerful guys on the Street. Or even the most powerful people in the world. Take Dick Cheney. Read his bio. His family did not usher him into anything.

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Jan 7, 2020

No one without proper lineage is getting into my country club.

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Apr 22, 2010

Fully agree with prospie. It's an uphill battle for a lot of people breaking in, but definitely doable nonetheless. It just depends on how hard you work and how well you play the game.

Apr 23, 2010

I will have to agree with ke18sb - "Clearly there are some nonwhite kids that get PE jobs, some friends of mine included, however those cases appear to be few and far between." I know people, who work and have worked very hard and are essentially nowhere, and to me it seems that is because of their, let's say, "non-white" background. Of course, it is not as bad as it has been before, but if you don't have it in you (the family, the money) - you have to work times harder and constantly prove yourself or get lucky. I don't think anybody will turn down the best candidate, but getting the confidence, the contacts and the experience as a nobody in PE land is quite the bitch.

Apr 23, 2010

Uhm, I've seen a significant number of Asians in legit PE shops.

Apr 23, 2010

I'd like the clarify a bit when I wrote WASP. I was doing that in part to sugar coat what I really meant to say white. Not east coast, not christian, not old money, straight up white. You can extrapolate this further and say most have pretty decent looks and seem fit. My impression is that there must be a underlying, probably subconscious and intentioned (then again maybe not), discrimination in the industry. This has led me to believe a PE associate position is obtained more so a fit interview process than anything else. I guess you can assume that to get an interview you have go to have the experience and skill set and thus there probably isn't a huge talent variance in the quality of the interviewees. Thus you get to fit: cultural, personality, presentation, maybe even looks etc. It just seems to me that these funds stick to their own and go white, the vast majority of the time.

I'd also like to point out that whether true or not I do not agree with the practice.

Apr 23, 2010

That is probably somewhat true. In regards to looks, when I look at associate profiles at PE shops, they definitely are on average better looking than the average man in america.

Apr 23, 2010

jews run this cityyyyyyyyyyyyyyyyy

Apr 23, 2010

If so, than I wonder what kind of a hit your chances of entering PE take when you go bald...

Apr 23, 2010

Didn't you hear bald is the new grey....just ask lloyd

Apr 23, 2010
ke18sb:

Do people think there is what I'd like to call a WASP ceiling for the transition to private equity

Some names that don't sound very waspish:

David Rubenstein
Stephen Schwarzman
Jerome Kohlberg
Henry Kravis is also of jewish origins

Apr 23, 2010

PE is no less diverse than investment banking i.e. plenty of Asians, quite a few women, hardly any blacks. And definitely loads of Jews - Carlyle, Blackstone, KKR, Goldman Sachs PE - all Jewish origins

Apr 23, 2010

don't forget about our boy Vivek @ Citi... or Jamie Dimon, who is Greek, I wouldn't say he's a wasp...

Apr 23, 2010

It makes sense that most people in PE are of a certain mold. We can assume that because it is such a WASP dominated or white, Jew dominated industry that the people who get doors opened for them probably have strong connections to the guys running the firms. These people are most likely to be the WASPs because they got the job from their father's golfing buddy (for example). Not to say these guys who have connections aren't qualified, just saying that they have similar socioeconomic backgrounds. Then the guys who wish to break into PE feel the need to fit the already established mold. Thus perpetuating the WASP image.

Apr 23, 2010

I also think a lot of it stems from the fact that humans are hard-wired to prefer people who are similar to themselves. This has been addressed ad nauseum in various cultural psychology journals and makes sense when you consider the survival techniques used by many of our ancestors. Racism and prejudice, in general, are a natural part of human existence as our ancestors were forced to make split second decisions based on external stimuli that ultimately determined their survival.

This is interesting to consider in the context of PE because PE in generally runs extremely lean and partners can choose from an elite group of candidates. I think there exists (even if it is latent) some prejudice in hiring based on my comments above. When you have so many qualified candidates and so few spots to fill, I think in general you will choose the candidate (background/qualifications equal) that is most similar to you.

Think about it from another psychological perspective. Individuals generally think they are (on average) better than someone else at the majority of random tasks. If you interview someone that reminds you of yourself you may feel more inclined to rate his ability above average (or in this case, above the other candidate).

Needless to say, there are plenty of well-qualified and highly successful PE players who come from a minority background but I do think there is some level of racism in PE hiring, whether it is overt or not.

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Apr 23, 2010

Yes, I see the same thing.

But then what I also see is that many of them have the aura of entitlement (perhaps old money/connections) and a certain snob factor. (I am only referring to the more junior folks as I haven't met any MDs). The pretentiousness is utterly annoying, and I am afraid to say that only cool PE people I have met were not WASP. Perhaps it's because they are more down to earth, since they understand how hard it is to break in to the old boys club.

Don't get me wrong. Perhaps everyone is just cool in general, but are forced to perpetually act like snobs to uphold this "image" and fit in - or get kicked out.

Apr 23, 2010

"Racism and prejudice, in general, are a natural part of human existence as our ancestors were forced to make split second decisions based on external stimuli that ultimately determined their survival."

I love the attempt at an intellectual justification of racism....

Apr 24, 2010

i'm at CVC London, we have quite a few different ethnicities. I really don't accept that PE favours one colour. It's about ability.

Apr 24, 2010

I really thinks it needs to be clarified that WASP is not in the slightest a synonym for white. Firstly, I may be white, but because I'm Jewish, there are country clubs that I still know I can't join. Secondly, the idea that private equity is run by old money is completely inaccurate. Do you really imagine that old-money WASPs desire to spend 100 hours a day with excel? That's incredibly beneath them.

I would also like to take issue with this statement:

Htown:

"Racism and prejudice, in general, are a natural part of human existence as our ancestors were forced to make split second decisions based on external stimuli that ultimately determined their survival."

I love the attempt at an intellectual justification of racism....

Racism is intellectually reasonable, for exactly the reasons described. In the absence of perfect information, and given high opportunity costs to obtaining further information, the natural and rational tendency is to act based on available data and preconceived notions. There's a reason both black and white cops disproportionately pull over black drivers. Is that a moral justification? Certainly not. But there is a logical foundation for racism, like all stereotypes, and pretending there is not is ignorant and intellectually dishonest.

Apr 24, 2010

I'm white, but I don't like pancake-butt. Can I get into PE?

Apr 28, 2010

http://www.icvcapital.com/team.php
See link for PE shop of choice

May 1, 2010
MonkeyMcGuy:

http://www.icvcapital.com/team.php
See link for PE shop of choice

LMAO what were they thinking? Do they not have any affirmative action!?

"I do not think there is any other quality so essential to success of any kind as the quality of perseverance. It overcom

Apr 28, 2010

Venture capital is a much more segregated industry. There is a decent diversity of white, Indian and Asian people in VC, but the gender ratio is astoundingly skewed. I'm generally shocked when I see more than 1-2 women at a VC fund, especially at more senior levels.

May 1, 2010
gomes3pc:

Venture capital is a much more segregated industry. There is a decent diversity of white, Indian and Asian people in VC, but the gender ratio is astoundingly skewed. I'm generally shocked when I see more than 1-2 women at a VC fund, especially at more senior levels.

You just described a typical engineering class at Stanford... probably not a coincidence

May 7, 2010

I completely agree to the statements above from my own personal experience, being a minority who will be joining PE in the fall. I would say that although I don't think it's explicitly intentional, I do believe white males have a advantage compared to others. When it comes down to it, deciding on 1-2 positions is very subjective when you're interviewing tons of capable applicants from various ethnicities / backgrounds / sexes, etc. You are going to naturally pick the people that you have the biggest connection with. And looking at the team websites of various PE firms, the middle/higher-level executives are predominantly white male. And I think headhunters only reinforce this cycle by the applicants they favor and send for interviews, albeit it may not be their fault (ie. they have to make $ and they're going to send the applicants that they believe to have the highest probability of success).

Jul 12, 2012

plenty of diversity in lower ranks, but joining the master class is a different ballgame

Jul 12, 2012

Fwiw, my firm is 100% WASPs and Indians

Aug 3, 2012
BlackHat:

Fwiw, my firm is 100% WASPs and Indians

I'm the only Black guy in my intern class,
I'm the only Black person in my intern class,

and this one White girl had the nerve to tell me there is no diversity in the office as far as male:female ratio goes, when there are about 10-15 females there.

Aug 3, 2012
Lotin:
BlackHat:

Fwiw, my firm is 100% WASPs and Indians

I'm the only Black guy in my intern class,
I'm the only Black person in my intern class,

and this one White girl had the nerve to tell me there is no diversity in the office as far as male:female ratio goes, when there are about 10-15 females there.

That's the best, bro.

Aug 3, 2012
Lotin:
BlackHat:

Fwiw, my firm is 100% WASPs and Indians

I'm the only Black guy in my intern class,
I'm the only Black person in my intern class,

and this one White girl had the nerve to tell me there is no diversity in the office as far as male:female ratio goes, when there are about 10-15 females there.

Total feminist move.

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Aug 2, 2012

Not sure why this got dragged out of the Dark Ages, but let me point this out just for shits and giggles:

http://www.icvcapital.com/markeze-bryant.php What a fucking fivehead on this fella.

I'm URM as well and I had a hard time taking this site seriously. "Certified Minority Business Enterprise?" What does that even mean? What good does that do! It's only further insulating ... doing the exact opposite of what it should -- breaking down whatever prejudicial barriers exist.

Aug 3, 2012
APAE:

Not sure why this got dragged out of the Dark Ages, but let me point this out just for shits and giggles:

http://www.icvcapital.com/markeze-bryant.php What a fucking fivehead on this fella.

I'm URM as well and I had a hard time taking this site seriously. "Certified Minority Business Enterprise?" What does that even mean? What good does that do! It's only further insulating ... doing the exact opposite of what it should -- breaking down whatever prejudicial barriers exist.

Not judging one way or the other, but many state sponsored retirement plans carve out a specific set of their assets for women and/or minority owned firms. If you are considered a minority or woman owned firm, these are specific opportunities to boost your AUM. That's why you would want to get certified. Below is an example.

http://perspective.opers.org/investments/opers-sel...

Aug 3, 2012

Who makes up potential PE hires? IB analysts. What do IB analysts look like? White, Asian, and Indian.

When a PE firm hires, they are going to consider fit, likely above all other factors. The banks and headhunters have vetted these candidates. They are all competent enough. You are going to pick the guy you want to work with.

An accent can kill you here. So can being seen as quiet (which might not be a bad thing in other cultures). Being attractive probably helps too. You have to be the guy people want to hang out with. And, to be blunt, how many of the guys you saw at parties in college were Asian?

Bigmonkeyballs:

Yes, I see the same thing.

But then what I also see is that many of them have the aura of entitlement (perhaps old money/connections) and a certain snob factor. (I am only referring to the more junior folks as I haven't met any MDs). The pretentiousness is utterly annoying, and I am afraid to say that only cool PE people I have met were not WASP. Perhaps it's because they are more down to earth, since they understand how hard it is to break in to the old boys club.

Don't get me wrong. Perhaps everyone is just cool in general, but are forced to perpetually act like snobs to uphold this "image" and fit in - or get kicked out.

Really? I know a lot of PE guys, and they're generally good guys. I actually haven't met a snobby PE guy, even among the people I know at megafunds. I think IB analyst programs beat humility into most young financiers. These guys have been working at least twice the hours of normal people for years on end...entitled is the last thing I'd call them.

Aug 3, 2012
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Aug 3, 2012