PitchBook financial writer Marina Temkin interviews Union Square Advisors’ Emily Anderson, who leads the firm’s private equity practice. Anderson shares her thoughts on the current M&A environment in a time of declining valuations and rising interest rates and how it could affect private equity activity. Plus, host Alexander Davis shares some insights from his recent reporting at SXSW, as well as the PitchBook news team’s two-year retrospective on the pandemic.
In the Upwork segment of “Innovations in Private Equity,” special guest host Tony Buffum talks to TPG’s Anilu Vazquez-Ubarri about diversity, equity and inclusion. Anilu discusses the impact and contribution diverse teams with varied perspectives have on innovation within PE firms.
Listen to all of Season 5, presented by Upwork, and subscribe to get future episodes of “In Visible Capital” on Apple Podcasts, Spotify, Google Podcasts or wherever you listen. For inquiries, please contact us at [email protected].
Transcript
Marina Temkin: Today with us, we have Emily Anderson. She’s a managing director at Union Square Advisors, a technology-focused investment bank. Emily leads the firm’s private equity practice. Emily, hi, welcome to the podcast.
Emily Anderson: Thank you for having me.
Marina: Great. Why don’t we start out by you telling me a little about what it is that you do day-to-day and what kind of advisory it is that you’re doing?
Emily: Union Square, as you said, is a tech-focused investment bank. We work as advisers in selling private companies which can be venture-backed, PE-backed or bootstrap/founder-owned, selling them to both strategic and private equity buyers. We also do buy-side advisory work—we’ve helped Permira, as an example, buy several companies. Then we also agent capital raises, so any large capital raise that is more of a minority-type investment, we will act as an adviser to those clients as well.
Marina: Could you describe a little bit, where you get involved in the sell side, how early in the process you get involved and also on the buy side?
Emily: In terms of the sell side, we at Union Square, because of our deep focus in technology and specifically in certain verticals within technology, we like to meet our clients very early and develop a long-term relationship. I would say in terms of size and scale, there are a lot of factors. One can be inbound interest, which is one of the major catalysts for M&A. If somebody comes knocking at that company’s door, maybe it happens a few times, it starts to get more competitive, starts to get more serious in those conversations, then we would start to spool up a process and we would work with the management team to prepare all the necessary documents, marketing materials and such. At that point, we’d think about who to go to in terms of the buyer/investor landscape, leveraging some of that inbound interest.
In more mature verticals—I’ll use marketing technologies as an example, although there are evolving aspects of that too—it’s going to be something usually more in the high teens to 30 million in ARR. [In] some of the very, very super high growth verticals such as fintech—which is, again, just an example—all of that can happen earlier, because there’s just so much competition for these innovative leading assets that the food fight just starts to happen at a much earlier phase in a company’s life cycle.
Marina: I’m wondering, are these companies that come to you when they’re still standalone or there are some companies that are already PE-owned and are looking to sell themselves?
Emily: Yes, it’s both. One of my roles at Union Square is to cover private equity firms as a whole, which is a twofold relationship. One, it’s making sure that we are showing them product, meaning companies that they can either invest in or buy. Then, it’s to be sure that we’re being thoughtful around their existing portfolio and when it may make sense for one of their portfolio companies to transact.
That could be a function of us spending time in a space and knowing that a certain strategic buyer is interested in a certain asset within their portfolio, or it could be the PE group [reaching] out to us ... [to] say, “Look, we’ve owned this for—fill in the blank—three-plus years. We’re thinking it makes sense to recapitalize the company.” Or they’re getting some knocks on the door [and asking], “Can you come in and share your thoughts around what a process may look like?”
Marina: I’m wondering, right now for PE firms, has the criteria changed in the recent years? Because last year and the year prior, primarily last year, valuations have increased tremendously. We’ve obviously seen big declines this year. Also, a lot of volatility in the public markets. I’m wondering, how are they looking at it? What kind of companies are they looking to buy right now?
Emily: It’s a great question. I wish I had the perfect answer, because it would make my job so much easier. But I would say, well, there are a couple factors. One, the amount of dollars flowing into private equity funds is so massive, and there’s a need to put that capital to work. In terms of valuations, I think we’ll continue to see high valuations for the best assets out there. Just because the competition is such that [for] most of these funds, regardless of interest rates or some of the other factors, there’s certain assets that are kind of a must-own ... and so you’ll continue to see some outside valuations for the top-tier best assets.
I think it’s the middle layer below that that’s going to ebb and flow a little bit more in line with the market, and that’s really due to just decreased competition, and some of those other factors. I think the overarching theme that private equity funds tend to think about, and I don’t want to generalize too much because they do all have very differentiated strategies, is this focus on rule of 40, which is the summation of revenue growth plus margin. And anything that gets you to north of that from a financial profile standpoint is going to generally be attractive to these buyers.
Marina: So rule of 40, that’s meaning if there’s a 20% growth [and] a 20% EBITDA, that in totality would be of interest to PE firms out there.
Emily: Correct. That’s, again, generally speaking. Even if it’s a rule of 40 company in a space where they’re not focused, then they’re probably not going to look at it. But if we’re trying to generalize and be as high level as possible, people will usually take a look or lean in. This is their sniff test, if you will.
Marina: In terms of sectors, because you said there are some assets that everybody wants to own and some that are just more middle layer, what would be the assets that people want? Are these in a particular sector, are there other spaces that are more hot than others, are there geographies that are really peaking? What is it that PE firms are going after these days?
Emily: It’s a good question and it really varies by fund. I think some of the areas of focus that I hear on a consistent basis are fintech. Well, a lot of it is B2B software. I think consumer goes in and out of favor. It’s somewhat in favor now, I think more so than it has been in the last few years. Now everything I say has a caveat because there are consumer-focused funds and that’s all they do and they’ll continue to do that.
I think if you look at a traditional private equity firm focused in software, [they’re interested in] very much anything enterprise software. They’re high recurring revenue-based models, long-term contracts, typically have very high renewal rates and a lot of predictability in terms of financial profile. Those assets will continue to be very interesting. In terms of actual sectors, I mentioned fintech, I believe. Anything in cyber, so security-focused. Anything in supply chain just given everything that’s going on in and around supply chain. [And] a lot of the ecommerce enablement companies, so ... you [can] think of Shopify as one of the key players in ecommerce enablement.
There are so many other companies solving point solutions or really focused on a specific vertical with a long tail. Those assets continue to be very attractive to private equity buyers. And that’s because it’s a completely changing ecosystem. Coming out of COVID, retail just completely changed, and so I think we’ll continue to see interest there. Human capital management, remote work is going to continue to be a theme where people are focused, and this is all in response to evolving ways of life and technology having to catch up.
Marina: What about valuations? Are you seeing both, for the companies themselves as well as the buyers, struggling to come up with the right valuation right now? Is there a discrepancy between the two, because obviously things have shifted so much and we also have this prospect of [an] increasing interest rate. Is there a gap between what people are willing to sell themselves at and what buyers are willing to pay?
Emily: I think there is. I do think there is more so than there was last year. I think just to your point the volatility has buyers wary and the sell side, while they can typically and again, I’m generalizing, appreciate the various volatile factors in the market, will still look at the most recent deal comp and want that valuation. Buyer sentiment has changed whereas seller sentiment hasn’t shifted quite as much, which I think creates a little bit of this gap.
Now I do think there’s still a point where the two come together, and typically those types of buyers and sellers have been in dialogue for some existing period of time and know one another quite well such that they’re able to get to a meeting of the minds. I think where the gap is a little bit more apparent and again, this is just one perspective, is in some of the new relationships—meaning buyer doesn’t know, seller quite as well, and vice versa—that you’re going to see a little bit more of the spread.
Marina: I’m wondering if you saw any deals fall through earlier this year, because there was such a massive drop-off in the stock market. I’ve heard of a few through the grape vine, and I’m wondering how that happened and whether the two parties ended up coming back to the table and renegotiating, or if it was just completely walking away from each other.
Emily: We have seen the market has certainly had an impact on many of the companies in the areas that we cover, including our clients and other people’s clients. Definitely, I think that there are just a lot of factors impacting both publicly traded buyers, but also the PE firms and LPs’ perspectives on risk and tolerance for risk. We have seen that.
In terms of coming back to the table. There have been times where we’ve had a buyer so close to transacting and everything fell apart and goes dark for six months, and then conversations reengage and then go dark for three months and then suddenly two buyers are at the table and we get a deal done.
Marina: That’s not atypical, that’s something that’s very common of the M&A in general. I was just wondering if you saw something that was very stark and different at the beginning of this year, because obviously the valuation reset was just so pronounced, much more than it has been in years and years probably. COVID notwithstanding because that was a quick drop and then things went back on track, but this pullback seems more protracted and people are probably getting more used to lower valuations, but I’m wondering what happened [in the] January, early February timeframe, where there are a lot of jitters around the dealmaking tables.
Emily: They’re definitely were. We did see [in] some of the deals that we thought were likely to go through ... some jitters on the buyer side that had nothing to do with the quality of the seller. In fact, some of the businesses, some of the assets that were being sold, continue to outperform and simply because of certain market volatility and jitters, as you say, these deals got put on hold.
Now, it’s not necessarily time wasted, because that relationship continues to foster and now that buyer once things settle out or anything could change. There could be a competitive dynamic that makes the asset being sold, the seller more attractive than it even was previously. So much work has already been done that that deal can then happen faster. We do see markets impact M&A and deals getting done, but you do actually more often than you think, see them ultimately transact, if there is enough strategic merit to the deal. To your point, we definitely saw that.
Marina: I understand that [in] a lot of the advisory you do, the ultimate valuations are below a billion dollars, but I’m wondering if you’re hearing, or if any of the deals you were involved [in], are companies that were possibly looking to IPO in 2022? Because this was supposed to be big IPO calendar year. Obviously, the IPO windows are shut tight right now. Are some of these companies looking to possibly sell themselves? Is there some a dual-tracking happening?
Emily: Almost everything is always a dual-track even if it’s not a dual-track. There are many strategic alternatives and while someone may be on an IPO track, there could always be a bid that comes in at the eighth inning and puts up a higher number than what the public markets were going to garner. We certainly see that, now just by way background Union Square, doesn’t a work on IPOs, so we’re less likely to be involved in a scenario that could go that route.
That said, we obviously are working with companies all the time who have plans to go public in the next 12 to 24 months. As they consider that option, because of the public market volatility, maybe they’re now looking at more of a majority recap transaction, whereby you hand the keys to somebody else, management gets to roll a piece in the new deal and then you postpone the IPO for another three to five years, whereby perhaps the equity markets are a little bit smoother and are open by then. Then, that gives the management team the quintessential second bite at the apple in terms of valuation.
While we’re not helping companies prepare to go public, we will help them with that final slug of capital, whether it’s a minority or a majority recap transaction. And then, the other thing that we do is SPAC transactions. While we don’t work on IPOs, we’re decently close to the public markets through SPACs.
Marina: I was just wondering if some of these companies that were looking towards the public market are maybe considering the M&A option more than they have in the past.
Emily: I think that’s true. Things that were potentially wanting to go public this year, they’re probably still doing the work to be ready for when that window, knock on wood, opens. That said, I think the great companies that really will have a great IPO are going to wait for the opportunity. Whether that’s 2022 or 2023, they care more about going at the right time than going within the fiscal year.
Marina: Last year was a record tech M&A deals market. What do you think [about] this year? Are the headwinds from lower valuations and rising interest rates going to slow down that statistic or [do] you still think there’ll be lot of deals getting done?
Emily: Well, I definitely wish I had a crystal ball as there are a number of deals that we would like to see get done, and there’s a lot of money that needs to be put to work. There are a lot of great companies out there that are looking to raise capital and or take out some of the investors that have been long in the tooth. I do think that there continues to be a lot of M&A that can, and potentially will, get done this year.
That said, back to the point we were talking about earlier, there’s a little bit of a valuation gap and there are some jitters on the buy side. Probably impacts the corporate buyers more so than the private equity buyers because they still have a mandate to be putting money to work. They’ll still be out looking for a certain number of platform assets. What’s slightly lower risk is going out and deploying capital on bolt-on transactions, meaning adding different functionality to your existing platform assets.
So there are several ways to continue to put money to work. I think that, again, it varies based on firm mandate and amount of dry powder and where you are in your deployment phase versus calendar timing around raising your next fund. I think that we’ll continue to see capital get deployed.
Marina: Yes. There’s certainly a lot of it and it has to go somewhere.
Emily: Exactly.
Marina: What do you think will be the big drivers of PE buyout activity this year? Sectors platforms, whether increased antitrust activity on the big tech will be a positive for PEs now that they can swoop in and buy assets at a more reasonable value.
Emily: I’m certainly not an antitrust expert, but as regulation around it gets tighter it does add a hurdle to some of the corporate buyers’ processes. Private equity is obviously going to have an angle there because it’s less of a factor for them, although, it’s tightening in both ecosystems. Private equity firms will have an advantage around the changes in antitrust. I also just think that there are so many factors driving PE M&A volume and antitrust is just one of them and probably not in my mind, at least.
That’s just one opinion. May not be the most important factor. They continue to focus on areas where they’re doing a bunch of work, where they know the three top asset; they’ve gotten to know the management team; they know what sort of a deal would make the most sense for both management and existing investors; they have a thesis around being able to pay a strategic multiple, even if you will, and have a list of 10 bolt-on transactions that they can go do after they buy asset X or whatever the platform investment may be. It’s that strategy that enables them to pay a strategic multiple, because they will, through the series of bolt-ons that may follow the platform investment, they’ll realize a number of synergies that ends enabling them to meet their return threshold.
Marina: Are platforms still the big thing that a lot of the PE firms work on?
Emily: Yes. A very common strategy in private equity is to buy a platform asset in an area where you have a team doing a ton of work. Then identify five to 10 similar assets that are subscale relative to your platform asset and go buy them up at decently attractive valuations because they are subscale. It continues to be a strategy that works well. They can then create a category leader, Space X, or whatever it is, and either take it public or sell it to a larger PE fund or do any number of things. We continue to see that be a compelling strategy, a smart strategy and I think we’ll continue to see it throughout the year.
Marina: Will there be more interest in buying VC-backed companies? Or will VC-backed companies will be more willing to sell themselves to a PE firm? In the light of very high valuations last year on the VC side. There may be some difficulty raising a subsequent round at a higher, even a flat valuation. I imagine that some companies may be forced to do down rounds. I’m wondering, what would be the dynamic do you think for the VC-backed companies that really overvalued themselves last year and ... [are] having a hard time raising again this year?
Emily: Again, it’s very company-specific and vertical-specific within technology. Sometimes that you’ll see based on where a company is in its life cycle, market appetite for cash burn as an example, ebbs and flows. Sometimes it’s more acceptable when investors are willing to over invest and take on more risk. I think we’re seeing because of everything going on in the market, that threshold, and this happened during COVID as well, that threshold for cash burn, definitely reduced. That’s when I think you can see deals get done in a down round situation, because regardless the company needs that next slug of capital in order to achieve the next phase and its life cycle.
While it may be not an optimal outcome to do the down round, thinking long term, which most investors and management teams do now, it is the best thing for the company. Because if you can get that company back into a rule of 40 scenario, then you could then garner a great outcome for everybody.
We see that a lot with our clients where they just need that final slug of capital. This is where we’ll see, instead of a down round, a company may choose hybrid security where you don’t necessarily need to set valuation. It allows the company to get the capital they need, get back on their feet, reduce cash burn, either get to profitability or achieve growth. Either one would contribute to that rule of 40 mechanic and then exit at a valuation that makes sense for everyone involved.
Marina: Do you think there’ll be more PE firms buying VC-back companies this year given that a lot of companies, a lot of startups, raised very high valuations last year and may be having a harder time raising a subsequent round now?
Emily: I think it’s very logical to assume that we may see more private equity activity on the buy side of VC-backed companies, given that IPO markets are somewhat closed and valuations have come down a bit. I think there are obviously a number of factors, but, these VC companies that may have been looking to go public this year, they’re going to have a set of investors who have their own fund-timing thresholds to meet, and they may need to exit.
While they would’ve loved to go public they maybe have their backs against the wall in terms of fun dynamics. That’s where private equity can be a very compelling exit option. I think it always is and varies depending on the type of company. But yes, I think in the current market, we’ll probably see private equity start to dip into some of these venture-backed assets that are really attractive but just don’t necessarily have the traditional way IPO option available today.
Marina: What about earlier stage VC-backed companies? Are we going to be seeing some of those also go out on the block and be bought by PE firms?
Emily: I think you continue to see private equity, growth equity and venture work well together, at least from our vantage point. I think that they all have different strategies and they can help one another throughout their fund dynamics. Sure. Does everybody love to sell their prized asset to a strategic buyer or take it public? Of course. I think that all investors are seeing merits to VC to PE and PE to PE as viable options as well, and just knowing that that may be the best option for the company. Yes, I think we’ll do definitely continue to see that.
Marina: What do you think is the most surprising thing about the current market and what are you most worried about?
Emily: I think I’ll start with the second part of that question. Given the conflict in Ukraine and everything going on in Europe, but also globally, I think it’s so difficult to have a perspective on what’s going to happen. I think everyone is sympathetic, empathetic, worried, all kinds of emotions around what’s going to happen both from a humanity standpoint and then secondarily from an economic standpoint. I think to say that I have a real view on what is going to happen would be a misstatement because I’m just as uneasy, worried and unclear as you know the next person around what to expect here.
Then in terms of surprising, I don’t think we’ve seen what’s going to surprise us the most this year yet. I think with everything going on in Europe and globally, we all thought we were coming out of this pandemic, supply chain was starting to get sorted out and then all of a sudden, we’re facing a potential war, or a war. I think it can have a slew of impacts on people and markets. I think we’re just in a situation where we don’t know what to expect. I know that’s a non-answer to the question, but I truly don’t even know what we’re going to see here.
Marina: It’s a very difficult time. Especially as far as geopolitics go, Emily, are you seeing deals being put on hold because of the geopolitical issues that we have now? Is that impacting what’s happening here at home?
Emily: It’s difficult to say. I think it depends on where processes are in terms of phase. I think things that have been announced and are closing, that’s more just procedural and will likely continue to completion. But I think in earlier phases of processes, you may see a little bit of nervousness mostly on part of buyers or anyone putting capital to work.
There are other situations where a buyer knows that they want this asset and they’ll do it regardless because they know that they need to deploy capital and this is the best opportunity available. It really varies and runs the gamut but, I think to your point, you do see a little bit of hesitation.
Marina: Thank you, Emily. This was very informative. I really enjoyed our conversation and learning about your view on PE M&A markets.
Emily: Thank you very much for having me, Marina. I enjoyed the conversation very much.
In this episode
Emily Todd Anderson is a managing director and head of sponsor coverage at Union Square Advisors. Emily has over 15 years of investment banking and transaction advisory experience primarily focused on the internet and digital media, software,and consumer retail sectors. Prior to joining the firm, Emily was a vice president at Code Advisors, focused on early-stage M&A and equity capital raises across the consumer internet and digital media sectors. Prior to Code, Emily was an associate in Goldman Sachs’ Consumer Retail Investment Banking Group, advising clients on M&A, IPOs and capital raises. Emily began her career at Ernst & Young in the Assurance and Transaction Advisory Services Groups.
Emily received a BA in business economics and accounting from UC Santa Barbara, where she was also a member of the varsity women’s soccer team. Emily also received an MBA from New York University, Leonard N. Stern School of Business and she holds a CPA in the state of California.
Sponsored content
Tim Sanders: Tim Sanders here and this week, our PE innovation focus is diversity, equity and inclusion. We have a special guest interviewer for this session, Upwork’s own Tony Buffum. He is a former-CHRO and long-standing expert in DEI who recently talked with one of private equity’s leading lights in this discipline. Let’s listen to that conversation.
Tony Buffum: Hello, I’m Tony Buffum, vice president of HR client strategy at Upwork. Welcome to another installment of “Innovations in Private Equity,” a PitchBook “In Visible Capital” podcast series sponsored by Upwork.
Today, I’m talking to Anilu Vazquez-Ubarri, partner, chief human resources officer, and board member of the board of directors at TPG, as well as a member of Upwork’s board of directors. Anilu, as a career HR leader, I’m very excited to be speaking with you in your capacity as a CHRO, but also as an Upwork employee, I’m thrilled to be talking with you as a member of our board.
And as a minority myself and someone that’s worked throughout his career in diversity and equity inclusion, I’m especially excited to be speaking to someone that has weaved all of that leadership together so successfully throughout her career. So, thank you for joining us today.
Anilu Vazquez-Ubarri: Thank you so much, Tony, for having me. It’s my privilege and my honor, not only to be talking to you and connecting with your audience, but to actually be fortunate enough to serve all those roles. I’m particularly excited about my role with Upwork. It’s been a true joy to understand more deeply what all of you do, and how you do it. I’ve been very humbling and privileged by the opportunities that I’ve had in my career, so thanks for highlighting those.
Tony: To kick things off, the whole conversation will focus on the world of PE, but we’ll start with a little bit more ... narrow of a discussion around PE firms, and what impact and value that DE&I has had for PE firms in your opinion.
Anilu: So I started my formal, or institutional involvement with DEI during my time at Goldman Sachs. But obviously, as a Puerto Rican woman, I started much earlier, in terms of my own observations, I’m sure you have to.
So I have always understood personally that there’s a benefit in being with people that think differently from you, that look differently, because there might be different reactions in the room to them. And that is informational content, that is relationship building, and it happens in the context of who we are and how we navigate the world.
It’s not just a construct of you being at work, whether we recognize it or not, we all bring who we are into those interactions. So I’ve been very aware of it as a woman of color myself, but as I’ve navigated from law to the financial world and specifically into private equity, it is very clear to me that the best decisions are made, when informed by different points of view. And by people that not only would look at things differently, but actually bring with them different networks, and different opportunities. And that is absolutely true from a commercial perspective.
Tony: Can you speak a little bit about the impact and the contribution that diverse teams and equity and inclusion has on innovation within PE firms?
Anilu: Yeah. For us at TPG, like every other organization in this industry, I would be hard pressed to say that we have achieved where we want to be from a diversity, equity [and] inclusion [standpoint]. There’s been a lot of progress, not only for our firm, but I do think that there are a number of firms in our industry that are trying not only hard, but smartly, to make progress.
And so when it comes to innovation, it comes from every angle. As I said, the bloodline of our industry is our investment committees, and an effective investment committee is one where there is different point of views and challenges to the status quo, where you avoid groupthink, and you can only do that when you have different information that you can bring to bear. And that is not just from ethnic and gender and LGBTQ, veteran, disability status, but those are also very important. It is definitely people who see the world differently, and in our industry, we are studying companies and management teams in very different sectors.
And I can tell you, for example, for us at TPG, there are a few examples of that. Our ability to go into impact investing in a very early way, and again, in a way that we have thankfully been able to lead the industry with the creation of [TPG] climate, and our impact investing franchise, which is very successful.
And again, we went at this in a very cool commercial way, so other people might have thought about this space in a philanthropic way, and there are certainly different interdisciplinary ways to impact this space, but we decided to go at it from an investing perspective and not have concessionary results as in the process. And we’ve proven that thesis, we’re glad that others in the industry are also moving in that direction. I am very proud to be one of the executive sponsors of something we call TPG Next, which is our investment in diverse managers, who are first time managers trying to stand up their own funds.
And we have three investments in diverse managers, and I would tell you that there is a clear commercial imperative that we thought would be true, and has absolutely proven to be true. Those managers have a different ecosystem than we do, they see different deals and opportunities. They see different companies that honestly, we, as TPG, we’re not going to see on our own, we need them as much as they need us. So the partnership works extremely well.
Tony: Well, that’s fantastic. You mentioned getting beyond the numbers as well. Tell me a little a bit about how firms can advance DE&I beyond just their staffing strategy and really integrate it into their company culture?
Anilu: My view on it, which has evolved over many years, is that people should concentrate in their superpowers. TPG’s an investing firm, so our need to influence the investing world is probably not only our responsibility, but probably the best probability of success for us and for the industry and for this mission. And so TPG Next is an important example of how we think about the impact side of our business, but also having diversity at all levels of our firm, including at the senior levels where the decisions are made. The reason why it’s important to go beyond the numbers is that the numbers come and go.
And so you can be very successful on the hiring side, but if you’re not retaining people, promoting them, paying them in the right way, they will not only not stay—but it will be clear that there’s a disconnect between your words and your actions. And that’s not culture, culture is actually where that meets, where people know what to do when no one else is watching. And so for us it is very important that culturally DEI is enabled at all levels of our organizations and in all situations.
I think the biggest proof is in difficult situations: so COVID, when people go through difficult financial periods in their organizations, when it’s a moment of growth, actually, where maybe tough decisions need to be made. How difficult is it for you as an organization to stay focused on your diversity, equity and inclusion? If it’s something that becomes difficult that has to suggest to you that is not as ingrained as you may want it to be. But it’s also important for other reasons, and you alluded to this in my experience. It’s because the more seniority there is that is diverse, that will be the pipeline for more diversity on boards.
Because that’s how people get selected, people get selected on their track record, they get selected on their networks, which is why we need to diversify people’s networks, and we need to also make sure that diverse people get out of their comfort zone and are networking in the right places. But practically speaking, the senior ranks of organizations are the ones that are going to be populating our boards on a private level, or on a public level, and so there’s another set of reasons why having seniority that is diverse is important.
Tony: Looking back on your career and your experience, what would you say was one of your proudest DE&I moments, or accomplishments?
Anilu: I would say probably my proudest moment was to initially at Goldman, and I think at TPG, ... [be] able to distill diversity, equity and inclusion to the basic parts of it. On the one part, treating it [as] a business, so very data oriented, very analytically framed, with a high degree of accountability, and with the same cadence of reporting and checking on it that you would have any other important business side.
And then coupling that with the fact that it needs to be embedded into everything that a firm does, and at Goldman, the first thing we did that was very distinctive at that point—it was around 2013—was that we merged our diversity strategy, with our talent management and talent development strategy. And we created a group called Talent Development at that point, that integrated diversity across every part of the life cycle of an employee. And in particular, very important for promotions, and forces session planning.
And that led us to the creation of a framework of looking at pipelines for promotion, three, four cycles out, and really staying on top of that. And that’s a labor of love, because it takes many years, but that produced a series of partners [and] managing directors at Goldman Sachs that went on to be very successful ...
Tony: Well, Anilu, that, along with the rest of the wisdom that you’ve been able to share from your experience, your career experience especially with DE&I, really appreciate it, and I’m sure that the folks listening are going to get a lot in terms of how they can continue to innovate within the organization, leveraging DEI as a part of that solution, and build it into their culture for the best outcomes and success. So I want to thank you for joining us, and I really appreciate your time today.
Anilu: Well, I want to thank you Tony for inviting me. And as I said, I was attracted to Upwork for many reasons. One of them, to join the board, was because the board was diverse already. And so it showed me a lot of what the organization was about, and so thanks for having me, and it’s a pleasure to spend the time with you.
Tim: If you’d like to download our free report on innovations in private equity, which covers a variety of developments over the last year, visit upwork.com/pitchbook.
Until next time, this is Tim Sanders.
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Anilu Vazquez-Ubarri - Partner and the Chief Human Resources Officer at TPG
Anilu Vazquez-Ubarri joined TPG in 2018 as the firm’s first chief human resources officer to help build out the human resources function. Prior to joining TPG in 2018, Anilu was with Goldman Sachs for more than 11 years, where she most recently was the firm’s global head of talent and chief diversity officer. Vazquez-Ubarri is an expert and prominent voice on both human resources and diversity, equity and inclusion issues. She has been named one of the Most Powerful Latinas in Business by Forbes Magazine and was listed as one of the Top 100 Most Influential Latinas in 2020 by Latino Leaders. Anilu received an AB in history and Latin American studies, cum laude, from Princeton University and a JD from Fordham University School of Law. Anilu currently serves on the boards of Teach for America-Bay Area, Greenhouse, Upwork and the Fordham University School of Law Alumni Board.
Tony Buffum - Vice President of HR Client Strategy
Tony Buffum is an accomplished HR professional with more than two decades of experience leading global HR teams as well as driving transformational change in company culture, organizational design, performance management, and employee integration and engagement. He joins Upwork following a series of noteworthy leadership positions including chief human resources officer at FLIR Systems, VP of global human resources at Stanley Security, VP of human resources at Stanley Black & Decker and others.
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