Making DEI Part of Your Investment Strategy With Mary Hunt of RCP Advisors

As a woman in a male-dominated industry, Mary Hunt says it was because of the help of her mentors and managers’ support that she was able to succeed in the private equity investing world.

Her current role as Principal at RCP Advisors and the director of RCP’s Diversity, Equity, and Inclusion (DE&I) Funds Investment Strategy is her way of helping open the door to other underrepresented people who “don't naturally have that network of support, particularly in the business community.”

As DE&I strategy director, Mary has helped lead RCP’s investment focus toward more diverse GPs and emerging managers through the firm’s new program: Elevate. 

And she’s proven, through RCP’s report on diverse private equity investing, that diverse market managers in lower and middle-market equity investments consistently generated more alpha and performed on par with or better than the broader market.

Diversity “shouldn't be just to satisfy a mandate or a ‘check the box’ situation,” Mary says. “We are seeing significant alpha generated from diversity, therefore, it should have a spot in every portfolio.”

Mary joins Jon in this episode of Fund Flow to talk about how a firm like RCP crafts a DE&I-focused investing strategy. As an experienced LP, Mary also tells all about what LPs want to see when considering working with GPs and her biggest pieces of advice for emerging managers in a changing environment.

💡 Featured Guest 💡

Name: Mary Hunt

What he does: Mary is a principal at RCP Advisors, a private equity investment firm. In her role, Mary is responsible for sourcing, due diligence, and portfolio management of private equity fund investments. She is also the portfolio manager of the firm’s Diversity, Equity, and Inclusion Funds Investment Strategy.

Organization: RCP Advisors

Connect: LinkedIn

🗝️ Key Points 🗝️

Top takeaways from this episode

★    Diverse investments generate more alpha. When it comes to lower or middle-market private equity investments, RCP Advisors found that funds led by diverse managers performed in line or better than the broader market, and with less risk than non-diverse managers.

★     Experience is key. In today’s market, Mary says talent is an important asset for GPs looking for LPs. But having some experience under your belt is necessary. “If you don't have that partner level, soup to nuts experience on several deals to create an attributable track record, do it on your own,” she says. “You've got to develop some relationships with backers who will support independent sponsors.”

★     The emerging manager landscape is changing. More reps and managers are returning to the market than the LP community may have anticipated, leading to a potential shift in investment focus. There will always be a desire for emerging managers since they tend to be stronger performers, Mary says. LPs just have to figure out how to strike the right balance.

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