The interview below is part of an ongoing effort by McGuireWoods to profile women leaders in private equity (PE). To read previous profiles, click here. To recommend a woman for a future interview, email Amber Walsh at [email protected].
Beth Rahn is a principal and head of family capital at McNally Capital, a family-owned PE firm targeting thesis-driven investments in the United States, specifically founder- and management-owned companies. Rahn joined McNally Capital in 2013, leads McNally’s fundraising and investor relations efforts and manages the firm’s network of more than 800 family offices and investors, with a focus on harnessing the financial, intellectual and human capital of the firm’s investor ecosystem.
Rahn received an MBA from the Kellogg School of Management as well as a B.S. in finance and a B.S. in business administration with a concentration in marketing (with highest honors) from the University of Illinois.
Q: Why is it important for more women to pursue careers in PE?
Beth Rahn: Hiring more women in PE isn’t just the right thing to do; it’s the profitable thing to do. A multitude of studies has shown the correlation between hiring more women in the executive suite and increased profitability. If more women means higher profitability, that also means more rewards and promotions for a company as a whole — including both men and women. As a result, gender equality in the workplace is not a zero-sum game. A phrase I use regularly is, “Rising tides lift all boats.” The PE world, and in turn, the businesses supported by PE firms, is in a ripe position to benefit from more women in the industry.
Importantly, women bring different skills and perspectives to the table, including different attitudes about risk — a key variable in smart PE investing. Women are also more likely to mentor and sponsor other women, as highlighted in a recent McKinsey study. This, in turn, provides an exponential benefit to bringing more women into PE.
A well-known concept, highlighted by Lean In, notes that an equal world will be one where women run half of our companies, and nowhere can that impact be more pronounced than in PE investing.
Q: What advice would you provide to a woman-led company interested in securing PE?
BR: Partnering with a PE firm is a business marriage, and for most founders, their company is akin to their proverbial child. A five-plus-year partnership with a PE firm is a long-term commitment, particularly in today’s rapidly changing and fast-paced world. As a result, alignment in values is key. Founders and CEOs should make sure they are working with a PE firm that is aligned in mission, vision and values.
At McNally Capital, we spend a lot of time talking about continuity of mission, continuity of culture and continuity of capital when we partner with private businesses. We start by ensuring we are aligned with how a founder, CEO and management team want to grow their business — not the other way around — and that dynamic has been hugely impactful in our ability to partner with management teams and create value.
Q: How do you believe women of this generation will be able to influence the PE industry, particularly as the career path continues to evolve?
BR: Millennials are the largest generation in the current U.S. labor force, and no generation of talent has ever been as active and bullish on supporting diversity and corporate responsibility. The voice of support for women in finance, women supporting women and mentorship of women is louder than it has ever been. It has become increasingly clear that if companies want to attract the right talent, they need a diverse workforce. The world is changing by the day, and businesses that are able to adapt will be best set up for success.
I take a lot of pride in the diversity of the team we have built at McNally Capital, and as we continue to grow as a team, our commitment to continuous improvement will set us up for ongoing success.
Q: What advice do you have for young women considering a career in PE?
BR: The benefits to having more women in the PE industry are countless, and include profitability, corporate responsibility and diversity of skills and perspectives. To the young women who are considering a career in this industry, I say the following: Be the change you wish to see in the world. The challenge of diversity won’t be achieved unless diverse candidates throw their hat in the ring and lean in to careers in industries like PE.
Women should seek out and build relationships with sponsors and mentors, and then utilize those relationships proactively — for advice when asking for a promotion or raise, when working to build a network and when navigating industry cultures and norms. I’ve relied immensely on my male and female mentors throughout my career, and it has paid dividends.
Importantly, don’t forget to pay it forward. While I have no doubt that I will lean on my mentors for the rest of my career, I’ve also made it a priority to mentor and support other young women coming up the ranks in PE.
To contact Beth Rahn, email [email protected].