“Diversity is an attribute of excellence in decision making”, 3 questions to Ruulke Bagijn, Chair of the Board of AlpInvest – The Carlyle Group

As Head of The Carlyle Group’s Global Investment Solutions, one of the firm’s three business segments, Ruulke Bagijn is part of the leadership team of one of the largest global investment firms in the world. She also serves as Chair of the Board of AlpInvest, Carlyle’s dedicated private equity primary fund, co-investment, and secondary solutions platform with a $63 billion AUM (per Q4 2022) and investment professionals in New York, San Francisco, London, Amsterdam, and Hong Kong. In addition, Ruulke Bagijn is a member of the AlpInvest Global Investment Committee, which makes all investment decisions in Europe, North and Latin America, Asia, and Australia on behalf of its 425+ investors worldwide.

Based in New York, Ruulke Bagijn has 20+ years of experience in global investments and a deep knowledge of private capital portfolios. She joined AlpInvest from AXA Investment Managers – Real Assets, where she was the Global Head of Real Assets Private Equity and a member of its Management Board.

Before that, she was Co-Chief Investment Officer of Investment Management and Chief Investment Officer of Private Markets at PGGM, with direct responsibility for managing investments in infrastructure, hedge funds, structured credit, private equity, insurance-linked securities, and private real estate, and held senior roles at ABN AMRO.

A passionate advocate of the business case for diversity, including involving more women in private equity, Ruulke Bagijn has been named a Wall Street Journal Pro PE ‘Woman to Watch,’ sits on the Carlyle Diversity & Inclusion Council and is an inaugural member of the Milken Institute’s Center for Financial Markets DEI in Asset Management Program, designed to improve diversity and promote an inclusive culture within asset management institutions for women and Black Indigenous People of Color (BIPOC).

Born in the Netherlands, she was also the inaugural chair of the Dutch committee of Level 20, the not-for-profit body established to inspire women to join and succeed in the Private Equity industry in the Netherlands. Ruulke Bagijn received an MSc in economics from Erasmus University Rotterdam, is a CFA charterholder, and serves as a member of the Netherland-America Foundation (NAF), which supports high-impact exchange between the two countries.

You are personally very involved and passionate about DEI; can you tell us how things have changed over your career? What are the next challenges? Which area of DEI needs the biggest push today?

The landscape has changed dramatically over the course of my professional career. At the start of my career DEI was not even a topic. I have witnessed and experienced the extent of this sea change over the last 20 years.

Sheryl Sandberg’s book “Lean In” published in 2013 was for me personally an eye opener and it triggered discussions and ultimately change in the corporate world for women.

Investment firms have made tremendous progress to allow more people to achieve their potential. Because that is what promoting DEI is all about – removing barriers for all talented people to succeed and to build an organization where all people thrive, there is trust, and people have a voice. At Carlyle, we believe diverse teams ask better questions and inclusive teams find better answers. For many years, the firm has been committed to DEI. We are on a journey to create a culture that seeks out diversity and fosters inclusion－ within our firm but also in our investments. We believe it is the smart thing to do; it gives us a competitive edge. There is a well-established playbook to help drive success. It requires intentional action: in general – it’s a series of many small, structured actions while continuously enlarging the group who carry those actions. The firm’s playbook includes focus and attention from leadership, a compelling “why”, having aspirations for improvement, collecting and monitoring relevant data, as well as education so each person at the firm knows how they can contribute to an inclusive culture.

AlpInvest, you run one the largest private equity investment firms globally in the Alternatives industry. How do you / are you able to bring to bear DEI in your investment decision, selection?

At Carlyle and Alpinvest, we take our DEI responsibility very seriously and have worked to make progress over time. We’ve taken action because it helps us be more competitive.

There is a large body of evidence that diversity improves performance, including data from Carlyle’s own portfolio. For example, in 2020, we published proprietary research documenting that the average annual earnings of Carlyle portfolio companies with diverse Boards of Directors grew 12% per year more than the earnings of companies that lacked such diversity. To further understand the impact of diversity on group decision making, we extended our research to look at the association between deal team diversity and the distribution of investment outcomes. We found that diversity is an attribute of excellence in decision making. There is a large body of research that shows that homogenous groups often fall prey to “group think” whereby people of similar backgrounds have too much faith in each other’s judgement and walk into blind spots. Teams with diversity listen harder and prepare more which sharpens the discussion and ultimate performance.

At Carlyle, we have an aspirational goal to have a 30% board diversity ratio (gender and ethnicity, collectively) in our controlled, corporate, and private equity portfolio companies and we have accomplished that goal. In that regard, the change is well under way. Clearly, the next step is to reach better diversity at senior management level (“C suite”) and CEO level.

As for AlpInvest, we work with partners – PE sponsors – to invest in PE so we have a unique opportunity to drive change in several areas of our industry. We interact with over a thousand private equity funds, or GPs as we call them, and we work very closely with a network of over 300 private GPs. Our focus is on changing an entire industry and we are in active dialogue with the GP and LP community to promote industry-wide change. We send out Responsible Investment (RI) Scorecards which assess GPs policies in three key areas, including DEI. The RI Scorecards provide us with insights that allows us to have honest discussions with PE sponsors about how to create a more diverse and inclusive organization. Per annum AlpInvest has deployed $1.5-2bn to primary funds raised. Our various investment teams continue to identify opportunities for partnership with diverse GPs and maintain a broad pipeline of more than 100 actionable investment opportunities. Within our portfolio of sponsors, 42% of all new primary commitments we made within the last three years were with GPs that were classified as Advanced with regards to DEI Policies and Implementation.

We also lead and actively participate in industry initiatives on DEI to help advance progress across the broader industry. We were the inaugural underwriter of the Milken Institute’s DEI Asset Management Initiative. We are also a signatory of ILPA’s DEI In Action Initiative and sit on their steering committee.

You are originally Dutch; you have worked for a large French multinational and now you work in the US for a leading alternative asset manager. Can you compare and contrast European and American approaches towards DEI?

The US and Europe have historically approached DEI differently, but we are seeing a clear commitment from both sides today.

In the US we saw LPs asking about our DEI efforts early on, and now our investors in Europe want to know how we are making progress. Similarly, we saw European investors ahead of the US asking questions about climate change where many US investors are now very focused on it.

No matter where you are, it’s important to tailor the issues to the local priorities and reflect the needs of society.