Diversity in deals: A conversation with PwC Corporate Finance’s Stephanie Hogue (Part 1)

August 9, 2017

Getting a deal done has always required expertise with numbers, knowledge of industry and economic trends, and other business skills. In today’s complex M&A landscape, dealmakers also need to employ other abilities to ensure a transaction delivers at least its anticipated value.

One often overlooked advantage in achieving business growth through deals is diversity. This time of unprecedented connectivity means companies and their stakeholders – including customers, investors and employees – are increasingly exposed to views shaped by different experiences than their own. The success of an acquisition, alliance, joint ventures or other deal can hinge on taking these diverse points of view into account.

Stephanie Hogue has seen firsthand the benefits of considering diversity in deals. Based in New York, Hogue is a Managing Director and the head of US Debt Private Placements for PwC Corporate Finance.* She recently shared her views on the state of diversity in deals and the unique perspective and skills women bring to the deals process.

What led you to deals in the first place?

When I was in college, I really thought I would love marketing. I was a Division 1 athlete, had limited time and focused only on what I loved. Finance was my C class every semester. Accounting, too. I had no interest in it at all.

I went to work at Sears Roebuck and Co. after graduation as part of their leadership development program – a year-long training program before moving to corporate headquarters. On the day we started, they had changed the program into a seven-year store management training program, which was the antithesis of what I wanted to do.

Those of us who weren’t interested became internal consultants for Sears as they went through the integration of Land’s End. We all had responsibility for a division, improving inventory management and profitability, as well as communicating internal changes in the stores to various stakeholders. It was the first time I had seen what M&A meant in real life. From there, I went back to business school, studied finance, accounting and economics, and made a concerted effort to love finance.

I ultimately ended up at another Big Four firm in valuations, then moved to that firm’s global Strategic Initiatives team. We were responsible for deploying partner capital around the globe for acquisitions and integrating those acquisitions, as well as identifying underperforming niche businesses that we could spin off.

I worked on some restructures, divestitures and acquisitions, and really fell in love with the deal space. But I realized there was half of the balance sheet that I didn’t understand – debt – and I moved into debt capital markets. I worked for two French banks in New York and a South African bank in Sao Paulo, Brazil, and then was hired by PwC to build out its private debt business.

So there’s a pattern of “I like this, but I know I need to learn more to do it better.”

I think that’s consistent with most deals professionals. There’s an inherent intellectual curiosity that you learn something and then look for the next challenge. Or you identify a personal weakness and then try to fill that gap.

What were your thoughts on diversity in deals when you started, and how has that evolved?

I was very young when I went to business school and tried to blend in. I wanted to be on par with everybody else in terms of intellect and work ethic, and didn’t want to stand out in any way. It wasn’t really until I got to the director level, and was an American in Brazil, a DCM banker in structured trade, when I realized I view the world very differently because of who I am and my experiences, and that there is value in a different perspective.

At PwC, our clients hire us to solve problems. It wasn’t until one or two years ago that I really started thinking about how when we advise our clients, the more diverse points of view we can bring to the table, the more interesting the conversation is. I didn’t really see it when I was younger. Now I can recognize that when I sit down with my clients, they want a global point of view, an inclusive point of viewin terms of technical skills and ideas. They want solutions and problem solving.

That can come in many ways. It can come through different lines of service. It can come from different staff levels. It can come from different gender, race and ethnic points of view. There are a myriad of ways you can put that together, but the critical piece is that those differences are put together.

What gains have women made?

There has been a lot more conversation since the financial crisis about having diverse points of view. In addition, women influence something like 80% of investable or spendable assets in the country and are half of the workforce. But our voices aren’t as represented at the deal table, even though we’re impacted by those deals as employees, owners and consumers. Your best deal will happen when those end users, those buyers, are considered.

There also is an understanding that women bring different points of view and skills to the table, and those skills are valuable in a deals environment. These are things like relationship building and communication – intangible strengths. Some think men may make more efficient decisions – they’re very fast and deliberate. Women tend to be more effective, inclusive decision makers. When you bring both of those together – efficient and collaborative decision making – you tend to have a better decision, a better outcome.

We see that across market performance. Companies with a diverse board of directors, especially boards with multiple women, tend to outperform the market. Investors are now paying attention to the make-up of company leadership, as they see this diversity as a strength. Investors are financially driven; if it didn’t work from a return perspective, it wouldn’t be a focus area.

What other unique perspective or skills do women offer that weren’t as present before?

There’s a transition from thinking about clients transactionally to thinking about them holistically. Transactionally” is an efficient point of view. What can we do today? Then we move on. What can we do tomorrow? Then we move on. “Holistically” probably will take longer, but it will be a better solution. I think women are more confident of communication in a holistic manner with clients, recognizing that having the “right answer” is not the only answer.

There is a learning curve on both sides in terms of becoming a better advisor. That’s one thing that has changed over the last 10 to 20 years across professionals in the industry: that recognition that there’s not one right way to do something, and if you can learn from other people, you probably are going to be a better advisor.

That said, while anyone can keep another’s perspective in mind, it can’t be fully represented if you don’t have it at the table. Granted, every perspective can’t be represented in every deal – deal teams would be massive! But at the very least, having a mix of expertise, lines of service, ages, gender, socioeconomic backgrounds, sexual orientations, ethnicities or racial diversity … having some combination of that, and having it accepted at the table, means different points of view will be coming into that deal, and a better deal can be negotiated.

Take investment banking. Mostly white males, right? And it was always just assumed heterosexual, white male because they fit a stereotype. But I’ve had several colleagues in the industry disclose in the past year or so that they’re gay. They only recently have felt comfortable sharing their perspective, and how different their perspective is, and because we’ve spent time building that trust.

It’s easy to judge a book by its cover. But until we dig down and people feel comfortable disclosing these personal stories, the status quo prevails.

Read part 2 of our conversation with Stephanie.


Colin Wittmer

Deals Leader, PwC US Email

Curt Moldenhauer

Deals Solutions Leader, PwC US Tel: +1 (408) 817 5726 Email: curt.moldenhauer@pwc.com