Private Equity People - a Q&A with Laura Shen, Managing Partner of Headway Capital Partners

In the latest instalment of our Private Equity People series, we speak to Laura Shen, managing partner of Headway Capital Partners, about how she got into the industry, setting up her own firm, and what both employers and candidates can do to improve diversity in private equity.

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"Be pro-active. Seek out mentors, ask for help, ask for opportunities, improve your skill set, do more than you're asked, and take charge of your career." Laura Shen, Managing Partner at Headway Capital Partners

Shen is a managing partner at Headway Capital Partners, which she co-founded in 2004 with Christiaan De Lint and Sebastian Junoy. The team spun out together from Coller Capital, where the three worked together, initially to focus on small and complex secondary private equity investments, in which funds buy assets from other private equity firms and limited partners.

Now, Headway focuses on providing capital and liquidity solutions to other private equity managers by investing in co-investment and secondary transactions across Europe and the US. The firm has 18 members of staff and advise funds of more than €1bn (£880 million).
 

When did you first become interested in working in private equity?

Laura Shen was working in Goldman Sachs' leveraged finance team when she went on a due diligence trip with colleagues from the investment bank's private equity arm, to look at a US-wide chain of bowling alleys that the team was considering investing in. The broad range of information they were gathering piqued her interest.

"The trip gave me an opportunity to think about a business from the perspective of an equity investor rather than a debt provider," she says. "The private equity team really delved into all aspects of the business. The types of questions they asked and how they thought about the business was very different. I felt that that was something I would like to do as well."
 

What is it about private equity that keeps your interest?

"It’s been over 20 years and I’m still learning new things all the time, which makes it incredibly interesting," says Shen. She also credits the calibre of people working in the industry for making it a stimulating environment to be in.

"I've had the opportunity to meet and work with a lot of exceptionally smart and driven people - in my own team, in the managers we back, and in the management teams of our portfolio companies," she adds.
 

What advice would you give to people from diverse backgrounds starting out in the industry?

"I would say go for it, because it’s an amazing career," she says. "But pick your employer wisely - look for a culture that's truly supportive and not a firm that's just ticking a box by hiring their one diverse person."

Once they've been hired, it’s over to the person to make the most of the opportunity. Shen's advice? "Be pro-active. Seek out mentors, ask for help, ask for opportunities, improve your skill set, do more than you're asked, and take charge of your career."

She adds that she would give the same advice to her younger self: "When I was a child, I was told to put my head down and work hard. That doesn't work. You have to be pro-active."
 

What do you think it will take to improve diversity in private equity, and what are the benefits?

"There has been progress, but it's always slower than we would like," says Shen, citing the positive impact of organisations such as Level20, which campaigns for better gender diversity in private equity, and the Private Equity Women Investor Network (PEWIN), which forges connections between senior women. The reason it's been slow is because "change is always challenging, and progress always requires some level of risk-taking and going beyond your comfort zone."

There is unconscious bias on both sides, she adds: "There’s a natural and unconscious bias for firms that are predominantly white male to prefer candidates that fit in more smoothly with their existing teams, and there’s a natural and unconscious bias for diverse candidates to select firms, or even careers, where the teams are more diverse already."

To break this cycle, "we need to encourage people to take the first step - hire their first diverse candidate, give them opportunities to succeed, and if it doesn’t work out the first time, then try again."

The benefit to the industry is clear: without people from a broad range of backgrounds bringing in different perspectives, "there's a danger of groupthink," Shen says. She cites the figure that women control around 80 per cent of consumer purchasing decisions, so "understanding their point of view should be important in investment opportunities."

Quite simply, more diversity "makes us better investors," she says.

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