Women around the world are investing, or are willing to invest, at least some portion of their assets and resources into social investments. My research findings showed that the primary social cause of interest to high-net-worth women is Environmental, Social and Governance (ESG), and, in particular, gender equality.
Over half of the women I interviewed are actively searching for ways to support companies with equal representation on boards and in leadership positions. As one Norwegian executive told me:
“I would like to see banks run funds that consist of companies that illustrate gender equality. I think the returns would be at least as good as the market…I believe many men would also invest in a gender equality fund.”
I’m often asked, “How can I invest in a gender equality fund?” It isn’t so obvious where to find such opportunities via traditional equity markets. Banks and investment firms should make this easier for clients, but this hasn’t yet happened in the mainstream finance industry. On the positive side, there’s been a lot of movement in this women’s movement!
Anyone with a pulse understands that inequality is a huge focus today for women (and men) across all industries— from film to venture capital. And the money is starting to follow.
The recent Veris Wealth Partners report, Gender Lens Investing: Bending the Arc of Finance for Women & Girls, takes a detailed look at the many investment vehicles now available for gender lens investing (GLI).
“In just four years, assets under management (AUM) have jumped from $100 million to $2.4 billion today. The number of investment strategies has more than quadrupled, going from 8 options to 35…Since January 2017, an impressive 16 new strategies have launched. GLI strategies have launched in Canada (5), Europe (5), Australia (2) and Nigeria (1) and Singapore (1).”
Seize the Day!
Diana van Maasdjik, co-founder and executive director, of Equileap, an Amsterdam-based company that works with companies to accelerate gender equality in the workplace, says that she spotted a glaring need in the investment industry for detailed data on gender equality.
“Over the years I have felt strongly that gender equality is not happening quickly enough in corporations! I also know that money is power, and we can use money to change things for the better. I realized that if I can provide investors with detailed data on gender equality they would be interested in directing their capital in this way. Then the corporations would listen and design investment products to meet this demand.
We have created a methodology for scoring 3,000 companies around the world based on 19 criteria around gender equality. Our mission is to accelerate progress towards gender equality in the workplace, using the power of investments, knowledge and donations. Our data has been used to create numerous investment products, including an exchange traded fund for Canadian investors called HERS.”
A recent Forbes article, Support Strengthens for Female Founded Companies and Venture Funds, highlights this movement: “Wealth management firms don’t just want female founders as clients. Their other clients want to invest in women-led companies.”
A Swedish management consultant I spoke with offered her advice to the finance industry: “We know that female CEOs have a higher success rate and I would like to meet them! Banks and investment firms should host small events and invite 10 female startups and 10 wealthy female clients. Let them meet!”
I interviewed Pocket Sun, managing partner & co-founder at SoGal Ventures in Singapore for my 2018 research Smart Women and Risk-Taking. (Pocket made the cover of Forbes at age 24!)
“When I was only 23 and at graduate school, I decided to found my own venture capital (VC) firm. It was, and still is, a crazy idea. I was stunned by the industry stats: 94% of senior venture capitalists are men, and only 2.2% of VC funding goes to women CEOs. I was determined that I had to disrupt the space and create a new kind of venture capital firm that focuses on the younger generation, women founders, and value investing. Instead of looking for a job after graduation from grad school, I put my tiny savings from my previous corporate job into several startups and 10x outperformed my cheque size by providing true value to our portfolio founders. These little bets led to great things: we started to be recognized as the next generation investors, and deal flows started to flood to us.”
Pocket’s story just keeps getting better and better. Want to be inspired? Read about her ongoing success in this DailyMail.com post.
What does the future hold?
According to a CFA Institute report Investment Firm of the Future, “Financial service offerings have been largely homogeneous and non-differentiated to date. But the future is likely to take on personalized, simple, and speedy preferences, and the personalization can be extended to the extra-financial considerations involving issues related to sustainability and responsibility. This involves ESG and other softer dimensions of investing.”
The trend is your friend
The big opportunity for the finance industry is to understand their customers’ social causes and offer clear advice as to how they can access some of these ‘social investments,’ such as gender equal companies via traditional equity markets.