We sat down with Michelle Giddens, Partner at Bridges Fund Management
What is your current role?
I am a co-founding partner at Bridges Fund Management, the specialist sustainable and impact investor. I lead on Corporate Strategy, Investor Relations and Impact.
What attracted you to a career in private equity and how did you get started?
Before I came into private equity, I spent ten years working in international development finance with organisations like IFC and EBRD. I worked on a variety of deal types, from £500 microfinance loans in Bangladesh and Mongolia through to large debt and equity transactions in multinational joint ventures projects in Hungary, Poland and Russia. That experience opened my eyes to the power of investment to drive societal change as well as generating financial returns – which, in that case, meant helping countries develop or transition their economies. Around 2000, I started thinking about how we could harness the power of capital in a similar way – delivering strong financial returns while also tackling societal challenges – in my own country.
Around 2000, I started thinking about how we could harness the power of capital in a similar way – delivering strong financial returns while also tackling societal challenges – in my own country.
This led me to create Bridges in 2002, alongside my co-founders Sir Ronald Cohen and Philip Newborough. For me, the best thing about private equity is the breadth and depth of the relationship an investor can have with its investees, and the opportunity to bring value that goes far beyond the financial. At Bridges, we talk about bringing three types of capital to our investments: financial, intellectual and human capital. Doing this well requires a wide range of skills, which to me has always felt much more demanding and rewarding than other types of finance.
What were your motivations behind starting a new private equity firm?
It was clear to us that the UK was facing a raft of complex social and environmental challenges – like carbon emissions, the skills gap, the increase in chronic health conditions, and rising inequality. We felt that business and investment could play a vital role in tackling these challenges – and by meeting these unmet needs, could also tap into a huge growth opportunity and, thus, attractive returns. We launched Bridges to prove that concept.
What were the key challenges in starting a new firm?
When we first started fundraising, a lot of investors were sceptical about the idea that you could deliver both attractive financial returns and positive social and environmental impact. We didn’t just have a new team; we had a new strategy that nobody had really tried before. Thankfully, a far-sighted group of investors recognised the potential of the idea, allowing us to raise a £40m fund. The success of that vehicle has enabled us to raise a further £1bn of impact-focused funds since.
What advice would you give women interested in a career in private equity?
A good private equity investor combines the ‘harder’ financial skills required to analyse businesses with the ‘softer’ interpersonal skills necessary to build productive relationships over a period of time. In my experience, women who come into private equity are often very good at developing this combination of skills. What’s more, we’re going to see a huge transfer of wealth to women and millennials over the next 20 years – and if private equity firms are going to appeal to this type of investor, they’ll need people who can identify and empathise with these groups. And since both groups are apparently more likely to want to invest in line with their values, that’s particularly true for impact investing firms like ours!
What do you think it will take to improve the gender gap in private equity and do you think we will see significant change in the coming years?
We need to begin early with outreach and education, encouraging young women to consider a career in investment. Change is definitely happening – but it will take a long time before we see the benefit of that, given that it takes decades to develop a new entrant at the junior level into a senior partner. In the meantime, the private equity industry needs to look hard at creative ways to introduce more diversity at senior levels in the short to medium term. As an industry we are falling far behind large companies and even other parts of the finance sector. It matters that we change this not just because it is the right thing to do; but because there is so much evidence that greater diversity results in better investment decisions.
