“Watermill Group’s president is doing something about private equity’s ‘bro culture’”

By Greg Ryan – Law and Money Reporter, Boston Business Journal


Lexington-based private equity firm Watermill Group, traditionally an investor in industrial manufacturers, is making a new push into investments in women-led businesses in a wider range of industries.

Named WMX, the initiative is the brainchild of Watermill Group President and Chief Operating Officer Julia Karol, who leads the firm’s day-to-day operations.

Watermill will look to invest in businesses with $20 million to $200 million in annual revenue that are either woman-led or have gender-diverse senior leadership teams, though Karol expects many of the investments to be on the lower end of that revenue range. The firm’s typical investment has over $40 million in revenue, she said.

Since the firm was founded by Karol’s father and grandfather four decades ago, Watermill has focused on industrials, a male-dominated sector. Still, it’s recently sought out businesses with gender-diverse leadership teams: Since 2015, approximately 30% of its investments have featured either women chief executives or leadership teams with a significant number of women, Karol said.

But Karol remains bothered by the lack of diversity she sees in the world of private equity. Often, she said, she’s the only woman at the table in board meetings and management presentations. While the venture capital industry is at least trying to diversify itself, she feels private equity has barely taken even that step.

As an investor, Watermill already has an openness and transparency appreciated by female entrepreneurs, according to Karol. The WMX initiative is meant as a “proclamation this is important,” and a signal to executives that it is seeking out gender-diverse investments.

“The businesses we work with really like our communication style, that we don’t have the ‘bro culture’ so many of (our) private equity peers have,” she said.

Watermill will not have a separate fund for WMX investments. The firm makes its investments on a deal-by-deal basis, with a group of wealthy individuals participating in acquisitions alongside the firm itself. It’s not a high-volume shop: It currently has five portfolio companies.

This article was originally published by Boston Business Journal.

February 13, 2020