How Limited Partners Evaluate Diversity in Fund Portfolios

The Standards LPs Use to Evaluate Diversity

LPs rarely build diversity metrics from scratch. They lean on shared industry templates, so the data is comparable across GPs and across fund vintages.

Two frameworks lead. One sets the North American standard for private markets. The other extends the picture to Europe.

ILPA's Diversity Metrics Template and Diversity in Action

ILPA is the Institutional Limited Partners Association, the main standards body for LPs in private markets. Its Diversity Metrics Template standardizes what LPs ask GPs. The template collects race and ethnicity, gender identity (including a nonbinary designation), role and ownership designations, staff movement, and select portfolio company-level data.

The template pairs with the Diversity in Action initiative. Signatories commit to a set of actions. LPs agree to request the demographic data, and GPs agree to provide it, for new commitments or new fundraises.

According to ILPA's progress report, ILPA's Diversity in Action initiative launched in December 2020 with 46 founding signatories. At the end of 2023, the initiative counted 316 organizations as signatories. That growth signals mainstream adoption.

Invest Europe and the Global Picture

For non-US portfolios, Invest Europe sets the reference point. According to Invest Europe's reporting guidelines, gender diversity statistics appear as a recommended ESG KPI at the portfolio company level.

Two things matter here. The guidance is voluntary and sets no quota. According to Invest Europe, the 2024 ESG Reporting Template applies proportionally as companies scale, using minimum, recommended, and full reporting tiers.

It is the global layer that most US-centric coverage leaves out.

How California's FIPVCC Turns Reporting Into Regulation

California moves the same data from voluntary to mandatory for some firms. The Fair Investment Practices by Venture Capital Companies Law (FIPVCC) was enacted as SB 54 and amended by SB 164. It is administered by the California Department of Financial Protection and Innovation (DFPI), the state's financial regulator.

Covered firms report founding-team demographics on an aggregated and anonymized basis. According to Orrick, covered firms report seven demographic categories for portfolio company founding teams: race, ethnic identity, LGBTQ+ status, and gender identity, including nonbinary and gender-fluid identities. The list also covers disability status, veteran or disabled veteran status, and California residency.

Founder participation is voluntary, and firms may not incentivize responses.

According to Gibson Dunn, California's Fair Investment Practices by Venture Capital Companies Law requires covered firms to register with the DFPI by March 1, 2026. By April 1, 2026, they must submit an annual report covering 2025 activity. Penalties can reach up to $5,000 per day after a cure period.

One scope caveat is essential: the law reaches only VC firms with a California nexus, so it does not cover every US fund.

For LPs, the importance runs past compliance. The rule standardizes the same founding-team data allocators already request, so voluntary and regulatory reporting begin to converge.

The Metrics LPs Actually Request From GPs

Here is the practical payoff. When an LP asks about diversity, the request usually maps to a reporting level, a set of metrics, and the framework that defines them. The table below shows how those pieces line up.

Demand for this data is rising and standardizing. According to the Deloitte and NVCA VC Human Capital Survey, in 2022, 47% of firms said limited partners requested their DEI details that year. That was up from 41% in 2020 and 36% in 2018.

This survey covers US VC firms.

The private equity side shows the same direction. According to McKinsey, during fundraising, 53 percent of PE funds reported DEI metrics to institutional investors, up from just 3 percent in 2008. That figure comes from a small sample of 30 PE firms, so read it as directional.

Uma builds alongside funds and DEI leaders working toward shared standards, so the same data can move cleanly from GP to LP.