According to private equity market research firm Preqin, investor appetite is picking up and the number of interim closes is also increasing. As of April 2012, there are 449 closed-end private real estate funds on the road with an aggregate target of $166 billion. The number and aggregate target of funds on the road has remained steady since the start of 2012, when 450 funds were targeting a total $165 billion.

Among the top private equity real estate funds to close in Q1 2012 are, according to Preqin, Angelo, Gordon & Co’s AG Realty Fund VIII (North America, Europe, Asia)which raised $1,265 million and AG Core Plus Realty Fund III (North America, Europe, Asia) which raised $1,010 million; GTIS Partners’ GTIS Brazil Real Estate Fund II which raised $810 million; AXA Real Estate’s 589 million euros ($732 million) Development Venture III (Western Europe); AllianceBernstein’s $680 million U.S Real Estate Partners; Westport Capital Partners’ WCP Real Estate Fund III, which raised $571 million and is focused on the US and Tristan Capital Partners‘ Europe-focused Curzon Capital Partners III which raised 420 million euros ($522 million).

This week’s job posting is for a San Francisco-based private real estate asset management analyst at a high profile international fund-of-funds which is expanding its real estate team. Also currently hiring in the sector via Simply Hired website is investment banking firm Houlihan Lokey which is seeking an associate to join its real estate strategic advisory practice in New York. Rockwood Real Estate Advisors is recruiting for a senior associate – real estate capital markets. DLJ Real Estate Capital Partners is also looking to recruit an associate to join its New York team. And PricewaterhouseCoopers is currently hiring for a real estate senior associate based in New York, demonstrating further an anticipated pick up in deal flow.

The main qualities a candidate needs to demonstrate for a position within the private equity real estate sector is first and foremost a good level of understanding of real estate markets combined with advanced financial modelling skills. And, as for any position within the private equity industry, good relationship-building skills are a must – inside and outside the company. If you are looking to get your foot on the private equity real estate ladder at a well respected fund manager, then read on.

***Job of the Week***

Job Title: Private real estate asset management analyst

Firm: Partners Group

Salary: Undisclosed

Location: San Francisco

Firm Description (as cited via Partners Group website):

Partners Group is a global investment management firm with 25 billion euros ($31 billion) in investment programs under management in private equity, private debt, private real estate and private infrastructure. The firm manages a broad range of funds and customized portfolios for an international clientele of institutional investors. Partners Group is headquartered in Zug, Switzerland and has offices in San Francisco, New York, São Paulo, London, Guernsey, Paris, Luxembourg, Munich, Dubai, Singapore, Beijing, Seoul, Tokyo and Sydney. The firm employs over 550 people and is listed on the SIX Swiss Exchange with a clear majority owned by its partners and all employees.

Job Description (as cited via Partners Group website):

The successful candidate will be part of the global real estate asset management team. Tasks will include:

• Working with investment partners to monitor investment performance in relation to business plan targets by reviewing partner reporting, performing regular sites visits, and evaluating market conditions

• Writing quarterly reports to investors by providing asset specific narratives for each investment, and prepare internal quarterly valuation reports

• Developing and maintaining financial projection models for equity and debt investments in Excel and Argus

• Reviewing and analising the investment’s annual business plan, including operating budget, planned capital expenditures, and exit strategy

• Analising hold/sell strategies, significant capital expenditures, major leases, refinancings, and other major asset management decisions and prepare ad hoc recommendations to the investment committee accordingly

• Assisting the acquisitions team with underwriting and due diligence

• Supporting the investment solutions team with fundraising efforts by preparing presentations to prospective clients and participating in due diligence sessions

• Special projects as required

Qualifications/Experience (as cited via Partners Group website):

The successful candidate should work well in an entrepreneurial organization, be a self-starter, possess strong networking and organization skills and demonstrate the following profile:

- Bachelor’s degree in real estate, business, economics, finance, accounting or similar subject required
- 2-3 years of real estate industry experience (asset management preferred)
- Strong real estate financial modeling skills, including proficiency in Excel and Argus
- Fluency in English with strong written and verbal communication skills, including proficiency in Word and PowerPoint
- Ability to multi-task and work in a fast-paced and team-oriented environment
- Excellent interpersonal, analytical, and problem-solving ability, with strong attention to detail
- Ability to handle large volume of work; good organizational skills and ability to prioritize work and meet deadlines

If you think you fit the bill please apply here

For more private equity job opportunities head over to the peHUB career center, co-hosted with eFinancialCareers.com.

Image credit: Photo of jobs dartboard courtesy of Shutterstock

While Instagram, LinkedIn, Splunk and a few others have secured and sustained better-than-anticipated returns, the more common story in recent quarters seems to be one of underperformance relative to expectations. From Facebook to Zynga to Groupon, the most closely watched offerings in the social media space have all recently posted dramatic drops.

Granted, they’re all still worth billions of dollars. And early investors and founders should still walk away with enough to add their names to the world’s richest lists. But for those with smaller stakes – in particular, early employees with stock options – selling shares won’t deliver the kind of payback expected just a few quarters ago.

So what’s a newly sort-of-rich, stock option-holding working person with a day job to do? The yacht and private island are out of reach, and paying down the mortgage is so mundane. Launching or funding a startup sounds appealing, but it’s fraught with risk. And putting money in the stock market – well, that’s been a good way to make 0% returns for the last decade.

To put in perspective where much of the wealth from the latest run of exits will and should go, I spoke to a couple of wealth advisers with expertise in Silicon Valley new money. John Benevides, president of family office services at Harris myCFO, says he’s seeing increased risk-aversion. Hilary Martin, of the Family Wealth Consulting Group, says she’s seeing people becoming more socially and environmentally conscious about their conspicuous consumption.

Following are excerpts from our conversations:

peHUB:  We keep hearing about all the Facebook millionaires. Do you know just how many there are and, with the recent stock drop, what kind of windfall they’ll be looking at?

Martin: After lockup, I expect the majority of option holders at Facebook will come out with between $2 million and $5 million if the stock stays around the IPO price [but about 25% less at current prices]. Overall, among founders, employees and investors, there were a handful of billionaires, dozens of centi-millionaires, probably a hundred deci-millionaires and about a thousand millionaires at the IPO price.

peHUB: How about some of the other big exits? I’m estimating that for most venture-backed companies, about 10% of the stock goes to employees who are not in C-level positions.

Martin: In typical Silicon Valley companies, 10% is about right. In Facebook’s case, the company’s valuation rose so quickly that there was a lot less dilution. In this case, the number is likely to be 2x to 3x the normal — so the employees have more like 20% to30 percent.

peHUB:  The technology industry has long been a big generator of new wealth. But are there noticeable changes in the ways the newest of the newly wealthy – particularly those with earnings of a couple million as opposed to billions – are spending and investing their money?

Benevides: If you’re talking about what has shifted in terms of cycles, clearly 2008 and 2009 had a profound impact on everyone. For the most part we’ve seen a more conservative approach to wealth. For those getting several hundred thousand to a million or two million dollars, we’re seeing a more conservative approach to how they’re investing their funds. We’re also seeing, for larger portfolios in particular, a tendency of people to want to invest privately. They’re pouring money into non-liquid alternatives such as real estate, businesses and commodities. Part of what’s driving that seems to be a distrust in the market.

Martin: What we’re seeing really is this consciousness about being part of the 1 percent. There is a backlash in the public perception about being rich, so I think that people are making an effort to do things like get involved in movements. If you’re going to be public about your small windfall, then I think the cultural trend would be to get involved, give back, donate to charity, or invest in startup stage companies. That last one I would estimate to be very financially risky.

peHUB: Are there types of conspicuous consumption that are more popular, stable or in decline?

Martin: You’re more likely to buy a Tesla than a Ferrari or a Leaf or a Prius. But I actually think there’s some cache to people who keep their old cars. They drive around in their beat up cars because Warren Buffet does that. People are consuming more experiences, like taking three months and hiking Machu Picchu or taking a sailboat from Greece.

peHUB: What’s your general advice for techies who are poised to get a couple million bucks as a result of an IPO or acquisition?

Martin:  Windfall recipients are subject to costs that others aren’t. That’s because most people make money steadily over time, so they have the opportunity to figure out how to budget. With a windfall, the problem is if you make a mistake with that money, it’s gone forever. But people who’ve never had that kind of money don’t really get their mind around how much it is and, frankly, how much it is not. Five million dollars is spendable very quickly.

I’d say you should probably wait a year before you make any major decisions such as buying a home or doing something with more than 5% of the money. You really have to wait until the emotion from that windfall event. There’s a period after which those emotions subside and it’s afterward that you should put your investments into action.

Benevides: Planning is critical and pre-planning is even more critical. We focus on the national scene, and our opinion is that taxes will increase as we go forward, so active planning to address tax optimization becomes more important. Another part of the discussion is when and under what conditions to sell the options.

Wealth gets complex quickly, no matter what size windfall. And if you receive $500,000, $1 million or $1.5 million, you likely aren’t going to go off into the sunset for the rest of your life,  even though that is a significant sum.

Image credit: Photo of Tesla Roadster courtesy of Tesla Motors

UPDATE: Kleiner Perkins is right to be worried about its reputation after getting sued by one of its partners for gender discrimination, early results from a peHUB poll show. Of the 143 people who took the poll, just 45 (or 31.7%) say their opinion of the firm hasn’t changed since they learned of the suit. But 55 respondents (or 38.7%) say their opinion is now “much more negative,” and 42 respondents (or 29.6%) say they now have a “slightly more negative” perception of the firm. Has your perception of Kleiner Perkins changed? Take our quick poll.

Kleiner Perkins appears to be worried that the gender discrimination suit filed against it is tarnishing the firm’s image. Witness John Doerr’s open letter published on Kleiner’s website today.

“[U]ntil this matter is resolved I hope those judging Kleiner Perkins will remember one thing about us: our pioneering track record in diversity,” Doerr writes “We have long believed the best thinking comes from a diverse set of minds and have highly valued diversity in our partnership and ventures.”

Certainly, the allegations made by Partner Ellen Pao in her suit portray Kleiner in a bad light. But does the firm really have anything to worry about at this point, since nothing has been proven in a court of law?

Let us know if Pao’s suit has changed your opinion of Kleiner Perkins by taking our quick poll.

Image credit: Poll concept photo courtesy of ShutterStock

And Mavromates makes three. That’s the number of senior investment personnel that the $50 billion Massachusetts Pension Reserves Investment Management Board has lost within the last year. The latest to leave is Stanley Mavromates Jr., the pension’s chief investment officer since 2005. He announced he is joining Mercer, the Marsh & McLennan-owned consulting firm, as its chief investment officer, in late June.

Mavromates has been a key figure in MassPRIM’s efforts over the last several years to boost contributions to alternative investments, including private equity. As of April 30, MassPRIM had $5.7 billion in invested private equity capital, or 11.4 percent of its portfolio. That’s 1.4 percent over its 10 percent private equity target.

MassPRIM returned 22.3 percent in fiscal 2011, which is among the nation’s best returns for public pensions. That same year, its private equity program returned 17.1 percent.

“Stan [Mavromates] has been a major defining characteristic for PRIM over the course of the past decade-plus, and in a very positive way, and Stan has not only contributed tremendously to PRIM’s great performance and success, but has also contributed tremendously to PRIM’s positive culture,” MassPRIM Executive Director Michael Trotsky wrote in a note to staff.

Mavromates joined MassPRIM in 2000 as a deputy chief investment officer in February 2000, according to his LinkedIn profile. He held that position until March 2005, when he was promoted to CIO. Before joining MassPRIM, Mavromates spent 11 years as an investment officer at John Hancock Life Insurance Co., his profile states.

Mavromates’s departure could be another casualty of the inferior compensation typically available at public pension systems compared to similar opportunities in the private sector. At MassPRIM, the compensation issue was apparently severe enough that the system formed a compensation committee specifically to find ways to boost pay and incentives.

Mavromates did not respond to calls seeking comment on his departure.

His decision to leave MassPRIM adds to the growing number of vacancies among CIO roles at the nation’s largest pension funds. Among the pensions still looking to fill CIO positions are the $140 billion New York State Common Retirement Fund, the $73 billion Oregon Investment Council, the $72 billion North Carolina Retirement Systems, the $25 billion South Carolina Retirement System and the $11 billion Los Angeles City Employees’ Retirement System.

Mavromates departure follows those of two other key members of MassPRIM’s private equity team: Wayne Smith, who had headed the private equity portfolio, and his deputy, Michael Langdon. Smith went to Pathway Capital Management and Langdon to Hermes Global Private Equity.

Gregory Roth is a senior editor at Buyouts Magazine and peHUB. Follow his tweets @RothReuters. Follow Buyouts tweets @Buyouts.

Image credit: Photo of Beacon Hill courtesy of Shutterstock.

But it may not be a straight line between here and there. Just ask Facebook, where a surge in mobile use slowed revenue growth as the social pioneer shows fewer ads in its mobile news feed.

Meeker, a partner at Kleiner Perkins Caufield & Byers, gave the latest of her famed Internet slide presentations today at the AllThingsD D10 conference. It was a gargantuan slide desk, 112, to be exact.

But it is a journey worth taking. Let’s start with the opportunity:

Mobile traffic is on the rise. Ten percent of all Internet traffic now comes from mobile devices, such as smartphones and iPads. And growth is increasing. Mobile traffic in India this year surpassed desktop traffic for the first time.

It stands to reason then that the ad opportunity in mobile is huge. Mobile media consumption is now 10% of all media consumption, Meeker points out. But mobile ad spending is only 1% of the market. Obviously there is plenty of room for expansion.

The bad news is that mobile advertising CPMs are almost one-fifth of those for ads sold on the desktop Internet. Pandora suffers from this gap. So does Zynga, Google and, of course, Facebook. But this could change.

To make her case, Meeker turned to Japan, where GREE, a mobile gaming company, has seen its average annual revenue per mobile user rise. It rose to an astonishing $24 in the first quarter.

It might be worth pointing out that Japan has among the world’s highest 3G penetration, at 95%, so the available audience is huge. (Korea follows at 85%, Australia, 76%, and Sweden, 73%. Penetration is relatively strong in the United States at 64%. Trailing are Germany at 36%, and France, at 45%.)

You will find all these details in the slide deck. But I digress.

The point is you can get attractive monetization in economies where mobile use is high. Consider another Japanese game maker, CyberAgent. It gets greater average revenue from its mobile subscribers than its desktop subscribers, Meeker points out.

So the question becomes where is mobile growing? Just about everywhere. Only 18% of mobile users are 3G customers, so the market has lots of room to run. And run it is. China is seeing 3G subscriptions grow 115% year over year and in India, a phenomenal 841%.

Attractive monetization also may come from e-commerce, but it is less clear at this moment. In the United States, mobile e-commerce accounts for 8% of all e-commerce, Meeker points out. That share has been growing strongly, but fell in the past quarter, suggesting that it is a trend worth keeping an eye on.

What is clear nonetheless is that the world it not standing still.

Today 953 million smartphones are in use, but only make up a modest slice of all 6.1 billion mobile phone subscribers. And there is no lack of interest in these new devices. The sell-through of Apple’s iPad has been three times as fast as its iPhone. The adoption of phones with Google’s Android operating systems is even more amazing. Growth is proceeding at four times the pace of the iPhone.

So the world will look a good bit difference even a year from now.

Photo courtesy of Shutterstock.

C. Richard Kramlich isn’t listed as a general partner on New Enterprise Associates’ fourteenth fund, and sources tell peHUB that the co-founder of the storied venture capital firm has substantially dialed back his activity with NEA. Kramlich has spoken with numerous colleagues about retiring, and limited partners in the firm’s fourteenth fund expect that he’ll have little to no involvement with it.

However, up until—and through—the VC’s thirteenth fund, Kramlich was very active with NEA, as a general partner, even moving to Shanghai to help form the firm’s China practice. He co-founded the venture capital firm in 1978, and went on to help develop companies including Juniper Networks, Ascend Communications and Macromedia.

Earlier this year, peHUB exclusively reported that NEA would pursue about $2.5 billion for its upcoming fund, the latest in a series of multi-billion dollar funds for the venture capital firm. Most of the firm’s recent vintages have been top-quartile performers. NEA is expected to close its 14th fund this summer.

Kramlich has overseen a generational shift for the VC industry. When he helped launch NEA a quarter-century ago, the firm’s first fund reeled in a meager $16.4 million. Earlier this year, when Kramlich spoke at Harvard Business School, he said 2011 (in part thanks to Groupon’s mega-returns) was NEA’s best year yet from a liquidity standpoint. The re-opening of the IPO window provided the firm with nearly $4 billion in exits, he said.

Recently, it seems, the venture capital business has seen a series of personnel shakeups leading to shuffling of senior ranks at VC firms. Sequoia Capital’s Mike Moritz told LPs that he’ll be stepping back from the business, due to health problems. Kramlich has not had much involvement with NEA’s individual investments recently, though he still has a number of board seats with the VC’s portfolio companies.

peHUB contacted multiple individuals with NEA for this story, none of whom provided comment by press time.

Image Credit: New Enterprise Associates

Despite several requests to reach Edwards and get an official statement from the university, neither was made available.

Abbott, Edwards’s predecessor, stepped down as chief investment officer just six months after assuming the role in late 2010. At the time of his departure, the university issued a statement saying: “It had become apparent that his style of conducting business is inconsistent with Cornell’s policies and expectations.”

Cornell declined to elaborate on the reasons for Abbott’s exit saying it does not discuss personnel matters.

Edwards, who was elevated to the role of interim chief investment officer following Abbott’s resignation, had previously been, since March 2008, a senior investment officer at the endowment.

Cornell’s endowment, with $5.4 billion in assets, was the fifth-best performing endowment among the Ivy League’s eight universities during fiscal 2011, posting a 19.9 percent return in the year that ended on June 30, 2011.

Cornell had 19.5 percent of its assets invested in private equity as of June 30, 2011, or about $1.1 billion. Returns for the endowment’s private equity program were strong in 2011, posting gains of 27.8 percent.

The four best-performing endowments in the Ivy League over that time period also happened to be the largest. The Ivy League’s top performer was Columbia University, with a 23.6 percent gain. Yale University and Princeton University were tied for having the second-best endowment performance, with 21.9 percent returns, and Harvard University, which has the nation’s largest endowment with $32 billion in assets, returned 21.4 percent in the year ending June 30, 2011.

Gregory Roth is a senior editor at Buyouts Magazine and peHUB. Follow his tweets @RothReuters. Follow Buyouts tweets @Buyouts.

Image credit: Shutterstock

That’s right; we’re going into a long holiday weekend. With that in mind, I thought I’d find out what everyone is doing. Lest you forget, peHUB has often tried to figure out what PE execs do when they’re not working on deals. Do they jet to glamorous places, like Monaco or the Hamptons, and drink martini’s poolside? Are they spending the weekend dealmaking? Or, are they like the rest of us mere mortals and planning to hang out with the family?

The answer is it’s a mix. Many execs are attending graduations, some are golfing while others are traveling to Napa or to summer homes, so they can cookout and get away from civilization. Surprisingly, only a handful of buyout pros who responded to peHUB say they plan to work this Memorial Day weekend. They have deals that are closing, which is good for everyone, so we’re not complaining.

One exec says he plans to coach soccer and baseball, and then attend a Memorial Day picnic. “The last thing I want to do is travel,” the exec says. Another buyout pro plans to go to his wife’s 20th college reunion and then a wedding for an associate. He expects to top off the weekend with a Memorial Day cookout with family and friends.

Stewart Kohl, co-CEO of The Riverside Co., will be attending his own 35 year reunion at Oberlin College. He plans to catch up with old friends and see “what became of all of the women who rejected me over those four years,” he says with a laugh.

He will also be speaking on a panel about what it’s like to run a PE firm alongside his classmate and co-CEO Béla Szigethy. If beer or wine is served, Stewart says he plans to imbibe but just modestly. He also hopes to take a nostalgic bike ride around Oberlin.

The most romantic getaway goes to this PE exec. He’s heading to Rome to celebrate his anniversary with his wife. The trip is a “reward for all her patience,” the exec says.

Another buyout exec, who grew up playing basketball and baseball, lamented the cultural divide that exists between him and his son. The exec is heading to the lacrosse Final Four at Gillette Stadium in Foxborough, Mass. “Which shows how far my kids are from my roots,” the person says.

The most intense pursuit this weekend? One PE pro will be racing cars in Monticello, N.Y. Several high-powered execs race cars, the source says, but he wouldn’t name names. Motorsports are not for everyone, he says. Many people like the idea of racing cars until they actually do it. “It’s terribly expensive, it’s uncomfortable and you can get really hurt. Some people get car sick,” the source says. “You have to like the adrenaline.”

Racing cars, for this exec, is just a hobby right now, “but in a few years I’d like to do Daytona,” he says.

Photo courtesy of Shutterstock

Denver-based entrepreneur and executive recruiter David Sandusky says that first and foremost you need to get noticed by doing great work elsewhere. Ideally, he says, in investment banking or at a consulting firm that has a portfolio of rapid-growth ventures.

Experience within a start-up is also beneficial to understand the culture and nuances of how these deals work, says Sandusky. “It can also be a good test to determine whether you really want to be in this environment. With notable success and even failure, you may create the kind of personal brand that gets noticed by the VC community,” he says.

It is also important to focus on networking and career strategy. “Just because you know someone who knows a VC does not mean you are in the door,” says Sandusky. “The filters are tight and that is why there is a pedigree in this business.”

Set your strategy to show work ethic and success in evaluating deals, launching products and leading rapid growth teams. Get these notches on your professional belt while networking and adding value to the VC crowd. It will likely take time, but if this is where you want to be, it is worth it, he says.

***Job of the Week***

Job Title: Venture Capital – Senior Associate

Firm: Innovation Endeavors

Average base salary for a senior associate at a venture capital firm according to Holt – Thomson Reuters Private Equity and Venture Capital Compensation Report: $159,900; salary plus bonus – $215,300

Location: Palo Alto, CA, US

Firm Description: Founded in 2010 by Eric Schmidt and Dror Berman, Innovation Endeavors is an early stage venture capital firm that has backed over 100 entrepreneurs and more than 46 early-stage companies.

Job Description (as cited via Innovation Endeavors Web site):

Innovation Endeavors is looking to hire a full time senior associate to join its growing team. The role includes due diligence, supporting the growth and development of portfolio companies and community, helping to build internal processes, representing Innovation Endeavors externally and sourcing. The ideal candidate is someone who is smart, an independent thinker who works well in both structured and unstructured environments, resourceful and a go-getter as well as a team player.

The successful candidate will be a friendly, accessible point of contact for new companies and be responsible for:

• Due diligence of companies.
• Developing independent investment theses.
• Working with portfolio companies to enhance operations and performance.
• Creating processes and infrastructures to help Innovation Endeavors’ scale.
• Helping generate high quality opportunities through sourcing

Qualifications/Experience (as cited via Innovation Endeavors website):

• Passionate about technology, big ideas and pioneering new ways of engaging with and supporting entrepreneurs.
• Excellent written and oral communication skills as well as being very organized.
• A Bachelors degree or graduate degree from a top-tier school.
• A minimum of 2-5 years of work experience in the venture capital, consulting or technology industries.
• Strong financial analysis skills.

For further information and to apply click here.

For more private equity job opportunities head over to the peHUB career center, co-hosted with eFinancialCareers.com.

Image of red billboard courtesy of Shutterstock

Pao (pictured), who is currently an investment partner at Kleiner Perkins, filed suit against the firm on May 10 in the California Superior Court in San Francisco. (The full text of the suit is here.) Briefly, the suit claims that Pao was harassed and retaliated against by former Investment Partner Ajit Nazre, with whom she was briefly involved; that Investment Partner Randy Komisar gave her a book with “many sexual drawings and poems with strong sexual content;” that Pao was repeatedly excluded from men-only business gatherings with clients; and that she was short-changed in compensation and promotion.

A Kleiner Perkins spokesperson has said the firm investigated Pao’s claims and “believes the lawsuit is without merit and intends to vigorously defend the matter.”

I talked about the case with Lynne Bernabei, a plaintiff’s attorney at Washington, D.C.-based Bernabei & Wachtel who specializes in employment discrimination cases. Here’s our conversation, edited for length and clarity:

Q: Do the claims made by Pao resemble the sorts of charges you’ve seen in other sexual harassment and discrimination cases?

A: ”The overall behavior seems very common — excluding her from parties and business-related gatherings. That’s an issue because in this particular industry it’s very important to get together for a social occasion. Then there were also the sexual harassment charges. If the facts are what she alleges, then it is really retaliation for refusing to have sexual relations with two partners.”

Q: Were there unusual elements in the suit?

A: ”Some of the parts that didn’t really make sense were some of the remarks that were made. One person saying: ‘You should marry this guy.’ That was one of the comments for which I thought: ‘This seems unusual.’” [The suit claims Pao talked about her problems with KP Partner Ray Lane, but that Lane told her to "drop the matter" because he was Nazre's mentor, and that Lane even encouraged Pao to marry Nazre.]

Q: We have seen discrimination and harassment lawsuits filed against financial services firms and asset managers, though I’m not aware of another high-profile case involving a venture capital firm. Are discrimination and harassment uncommon, in your view, or are people reluctant to take legal action?

A:  ”We see a lot of cases in industries where there aren’t many women. At upper level meetings, sometimes the women complain that they feel uneasy [due to the tone of conversation or remarks they perceive as sexist]. But most of the women I know in those positions, they sort of take a lot of it. They may say: ‘That makes me uncomfortable.’ But I don’t think it would lead to what we see in this case.

“I usually think at least 90% of the time, people who file lawsuits do so reluctantly. Litigation is very hard on you, and getting involved in litigation is usually the last thing you do if you can’t resolve it reasonably. It’s also going to have a further impact on your career. You’re going to continue to be a black sheep in the industry.”

Q: A lot of the background story in the suit concerns Pao allegedly being harassed by partners and excluded from company gatherings. I’m curious about your take on the exclusion claims. When does not including someone in a work-related social event become a legal issue? Co-workers often go out for a drink or a meal, for instance, and it’s not considered obligatory to invite everyone in the office. But in some cases, leaving someone out of a gathering could deprive them of important networking and career advancement opportunities. Where do you draw the line?

A:  “It depends on the industry and the protocols in the industry. If there’s a social thing where people go out to drink, that sort of thing builds camaraderie in the firm but it’s not essential to doing one’s job. But I think that’s separate from meeting with clients. The things I read in the [Pao] complaint, those were more client-focused, business-focused social events.”

Q: When a prominent firm gets hit with a suit like this, it can have repercussions across the industry. From comments I’ve read on message boards, some are worried this case could have a  chilling effect on firms’ willingness to hire women. Others say it could be beneficial as it will encourage better practices. What are your thoughts on the likely impacts?

A: ”Firms have to hire the most qualified people. So they have a legal obligation to hire women if they’re the most qualified. Will this case impact the industry? It depends how far it goes, and it also depends how widespread the conduct she describes is in the industry. The only point you can make is that private equity firms have very few women in top positions. There is a glass ceiling, and a lot of women don’t go any higher, so it’s an overall problem. Will this suit be the one that brings all this to a head and makes people really think about it? I don’t know. But I can tell you the behaviors she describes are certainly ones we see a lot in industries such as hedge funds where there are very few women.”

Image credit: Photo of Ellen Pao via Kleiner Perkins