Gender lens investing

Gender lens investing is the practice of investing for financial return while also considering the benefits to women,[1] both through improving economic opportunities and social well being for girls and women.[2] The term was coined around 2009[3] and became an increasingly popular practice in the mid-2010s.[1][4][5]

Gender lens investing can include funding women-owned businesses, businesses with a strong track record of employing women, or companies that improve the lives of women and girls with their products and services. Sarah Kaplan and Jackie VanderBurg of U.S. Trust wrote of the practice that “Women launching and expanding ventures around the world have an estimated collective credit gap of $320 billion (the difference between the capital they are seeking and the credit to which they have access), which creates a major opportunity for investors.”[6]

History

An early example of gender lens investing was the Valeurs Feminines fund, created by the French money-management firm Conseil Plus Gestion in 2005 to invest in women-owned and women-led European businesses.[7] Firms that later offered a gender lens investment strategy for some of their portfolios included Morgan Stanley, Merrill Lynch, Goldman Sachs, U.S. Trust, Root Capital, Veris Wealth Partners, Illuminate Ventures, Trillium Asset Management, Gray Matters Capital, Golden Seeds, and the Calvert Foundation.[1][4][7][8][9][10] In November 2013, Joy Anderson of the Criterion Institute organized a summit for gender lens investors in Hartford, Connecticut.[10]

In 2017 National Bank of Australia announced that it had sold AUD$500 million gender equity bonds. The bonds invest in a portfolio of businesses which have received a gender citation from Australian Government body the Workplace Gender Equality Agency.[11]

Returns

Like other forms of impact investing, it can be challenging to find large opportunities for direct investment in gender lens investing. Portfolios therefore often consist of many small deals, which can be unwieldy or time-consuming to assemble. Critics of the practice also argue that it asks investors to give up some of the returns they could expect from a gender-neutral investment strategy.[1]

Supporters of gender lens investing argue that firms with a higher-than-average proportion of women in executive roles tend to perform well, possibly because of an increased diversity of viewpoints or because not discriminating against women allows companies to hire the best available talent.[7][12] Business Insider wrote of gender lens investing in 2015 that “It is a proven theory as most of the women-focused funds and investment strategies – a tiny slice of the $6.6 trillion-socially responsible investing world – have been standout performers over the years.”[13] According to The Guardian, women in microcredit programs also tend to have higher repayment rates than men.[14]

A Review commissioned by the UK Treasury found that supporting female entrepreneurs could generate as much as $250bn for the UK economy.[15] Businesses run by women were less likely, the report found, to deliver a turnover of more than £1bn. Supporting entrepreneurs would help to close this gap.

Joann Weiner of the Washington Post wrote more skeptically of the strategy’s ability to deliver above average returns: “Like all the rest, the ‘gender lens’ strategy will have its good times, and it will have its hard times… follow a ‘gender lens’ investment strategy if it makes you feel good. Just don’t count on making a killing in the market if you do.”[12]

References

  1. ^ Jump up to:ab c d Sullivan, Paul (August 14, 2015). “With an Eye to Impact, Investing Through a ‘Gender Lens'”. The New York Times. The New York Times. Retrieved May 17, 2016.
  2. ^“Gender Lens Investing Initiative | The GIIN”. thegiin.org. Retrieved 2019-01-10.
  3. ^Moodie, Alison (17 November 2015). “Investments aren’t gender-neutral when female entrepreneurs face a $320bn credit gap”. The Guardian. The Guardian. Retrieved May 17, 2016.
  4. ^ Jump up to:ab “Voices: Patricia Farrar-Rivas, on Gender-Lens Investing”. The Wall Street Journal. The Wall Street Journal. May 14, 2015. Retrieved May 17, 2016.
  5. ^Kane, Libby (August 14, 2014). “Here’s How to Give Back and Make Money”. Business Insider. Business Insider. Retrieved May 17, 2016.
  6. ^Kaplan, Sarah (Fall 2014). “The Rise of Gender Capitalism”. Stanford Social Innovation Review. Stanford Social Innovation Review. Retrieved May 17, 2016.
  7. ^ Jump up to:ab c “Women-focused funds make money, create controversy”. The Chicago Tribune. The Chicago Tribune. September 11, 2015. Retrieved May 17, 2016.
  8. ^Nelson, Jacqueline (March 20, 2013). “‘Parity portfolio’ places investment bets on women”. The Globe and Mail. The Globe and Mail. Retrieved May 17, 2016.
  9. ^Moodie, Alison (November 17, 2015). “Investments aren’t gender-neutral when female entrepreneurs face a $320bn credit gap”. The Guardian. The Guardian. Retrieved May 17, 2016.
  10. ^ Jump up to:abBank, David (October 24, 2013). “Women Are Hot…Investments”. HuffPost Business. Huffington Post. Retrieved May 18, 2016.
  11. ^“National Australia Bank sells rare A$500 million gender equality bond”. Reuters. 2017-03-17. Retrieved 2020-01-06.
  12. ^ Jump up to:abWeiner, Joann (May 7, 2014). “Can investors get rich by looking at their investments through a ‘gender lens?'”. The Washington Post. The Washington Post. Retrieved May 17, 2016.
  13. ^“Money making women-focused funds raises eyebrows”. Business Insider. Business Insider. September 12, 2015. Retrieved May 17, 2016.
  14. ^Ford, Alanna (March 20, 2014). “Celebrate Women’s History Month by mobilising your resources”. The Guardian. The Guardian. Retrieved May 17, 2016.
  15. ^Gibbs, Alexandra (2019-03-08). “Supporting female entrepreneurs could add $326 billion to the UK economy, review finds”. CNBC. Retrieved 2020-01-06.

Ofer Abarbanel – Executive Profile

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