(From left: Karen Bechtel, managing director, the Carlyle Group; Carrie Wheeler, partner, Texas Pacific Group; Jacqueline Reses, partner, Apax Partners; Sandra Horbach, managing director, the Carlyle Group; Melina Higgins, managing director, Goldman Sachs; Bodil Arlander, senior managing director, Bear Stearns.) Enlarge this photo

These are heady times for the private equity business. Each week brings an announcement of yet another recordbreaking buyout deal—with oversize paychecks to match.

But the $400 billion industry stands out in another, less favorable way: Private equity firms have some of the thickest glass ceilings in all of finance, employing few women and hardly any in top dealmaking positions.

Wall Street has always been the ultimate frat house, notorious for its foulmouthed trading floors, locker-room deals, and periodic mini-scandals involving after-work bacchanals. In recent years, prompted by lawsuits if not public shaming, the major banks and brokerages have made some effort to fix the testosterone imbalance. That has made the big banks look like models of gender equality compared with the private equity world, at least when it comes to the numbers. For example, Goldman Sachs says that 14 percent of its most senior managing directors now are female, double the percentage six years ago.

Even though some private equity firms have ballooned in size and broadened their activities beyond corporate buyouts, most maintain the macho culture forged in their early days as small partnerships. Because the firms are highly secretive, it’s hard to take a census, but the overall picture looks something like this: The 10 biggest private equity shops, ranked by announced deal volume for 2006, employ roughly 1,000 investment professionals in areas ranging from classic private equity buyouts to real estate investing. It’s difficult to determine how many of those are women, but it is possible to count how many of their U.S.-based, partner-level women are in charge of putting together deals. And the number is four. That’s right: four.

Further down the list, among the smaller but also influential firms, are several other women who can be considered part of the elite, including Jacqueline Reses of Apax Partners and Bodil Arlander of Bear Stearns Merchant Banking. But that’s pretty much it. So give or take a handful, the women in the photograph that heads this article represent the majority of female dealmakers at America’s richest private equity firms.

Several of the industry’s juggernauts share the dubious distinction of having precisely zero women in a true deal-partner role. A spokesperson for one of them, Kohlberg Kravis Roberts, said the firm has “a meaningful and growing number of women who are investment professionals.” None of the others we identify would comment further on the issue. Among the top firms that do a little better on gender statistics: Texas Pacific Group, with one woman among 17 buyout partners; and the Carlyle Group, with two out of 21. Goldman Sachs Capital Partners—the company’s main private-investment arm—doesn’t have any senior female dealmakers among its members, although there is one at Goldman’s Mezzanine Partners, which provides financing for private equity deals. At some of the firms, including the Blackstone Group and Bain Capital, women hold senior positions, but their roles tend to be in areas such as marketing, human resources, investor relations, and operations. There are also junior-level women at the firms who may one day ascend to senior dealmaker status.

Explanations for the gender gap run the usual gamut: male clubbiness, a lack of female mentors, and even outright discrimination. In the world of private money, all of that is exacerbated by an insular recruitment process. Rather than hiring a large class of entry-level analysts, as banks do, private equity firms tend to cherry-pick one person at a time. “People in small collegial partnerships tend to hire in their own image,” says Sandra Horbach, 46, a managing director at the Carlyle Group, who recently led the $2.4 billion buyout of Dunkin’ Brands, owner of Dun­kin’ Donuts. “And that just feeds on itself.”

John Megrue Jr., chief executive of Apax Partners, which has two U.S.-based female partners out of a total of 12, says improvement will come, but slowly. “You want to grow people internally and make sure everyone, regardless of sex and race, feels that it’s a meritocracy.”

Virtually all of the women in the private equity elite cite the lack of role models as a deterrent to women. As members of the first generation of females in a business founded not long ago by men, they say it hasn’t been easy to get men to take them seriously. “I have to work twice as hard and be twice as good to be half as successful,” says Arlander, 43, a co-founding partner at Bear Stearns’ private equity arm, who has completed 25 Ironman triathlons in her spare time.

Another challenge is finding ways to balance the punishing hours and intensity of private equity work with family. Two of the women in the photo, taken earlier this year, were pregnant with their first child; two others have two kids each, and their husbands share child-care responsibilities. The remaining two do not have children.

Reses, 37, a partner and head of the media investment group at Apax, says she focuses on her kids—she has two daughters under age four—and her job. “I took a very hardcore approach to the business and basically decided I don’t need to have any life,” says Reses, who helped put together the $5.1 billion buyout of Intelsat, a global satellite company, in 2004.

On some occasions, according to these dealmakers, gender can give them an edge in nego­tiations, especially now that there are more wo­men on corporate boards. “Women relate to people differently,” says Carrie Wheeler, a 35-year-old partner at Texas Pacific Group. She was responsible for the buyouts of Neiman Marcus, Petco, and MGM, and now sits on their boards. “Being the only woman can be an asset.”