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Gender Lens Investing: Why The Opportunities Are Growing

By Knowledge Wharton. Originally published at ValueWalk.

Suzanne Biegel, a gender lens investing pioneer at Wharton’s Social Impact Initiative, recently discussed the field’s latest trends.

Gender lens investing — using capital to alleviate the economic plight of women and girls — is gaining steam. From being a blip on the screen a mere two decades ago, this field is being embraced by more than 100 private and public funds. And their investment products are getting more targeted: Investors can put money in funds that aim to improve women’s access to health care, for example.

Gender Lens Investing
geralt / Pixabay

Suzanne Biegel, a gender lens investing pioneer now at the Wharton Social Impact Initiative, recently spoke with Nick Ashburn, the institution’s senior director for impact investing, to discuss the field’s latest trends.

An edited transcript of their conversation follows.

Nick Ashburn: What is gender lens investing?

Suzanne Biegel: Gender lens investing can be defined in a few different ways. One is to think about how you integrate gender analysis into financial analysis to get to a better outcome in any investment. Another way is to think about how we use capital intentionally to achieve positive impacts on women and girls.

You might think about women’s access to capital. You might think about products and services that positively affect women and girls or take advantage of the women’s market. You might think about where women show up across the value chain of a business, in governance, in leadership, in supply chains and distribution channels all the way through to end customers. And you might be thinking about how we use our capital intentionally to shift structural gender inequality.

Ashburn: Help me better understand the demand for this type of investment.

Biegel: When I started doing this kind of investing 17 years ago, it was hard to find other people who were ready to be in this conversation. There were people coming from an international development perspective who were asking, ‘How do we get capital to women entrepreneurs?’

The microfinance industry was thriving. There were people who were thinking about how we get capital to women entrepreneurs, especially in tech, because it was the boom of the tech emergence. There were people who were starting to think about women on boards and in governance, but it was very early. When I really looked to deploy capital 17 years ago with this kind of a lens, there was one fund that with a public equity strategy. There were some women’s opportunity loan funds in local communities, but it was pretty scarce.

Over the past 17 years, we have seen demand come from the investor community, from individuals to institutions, from players in the private markets to people in the public sphere and international development, multilaterals and the development finance institutions. And it’s coming for a few different reasons. One is because people are seeing the rise of women as consumers, whether that’s in B2B or on the consumer side.

The second is that people are sharpening their understanding of where the problems are around gender equality or women’s and girls’ access to education or health care or financial inclusion, and how capital can be part of the overall solution. People are seeing the opportunity that is out there to invest and back high-tech, high-growth women entrepreneurs or fund managers who are developing funds around women’s access to capital or around smart business that has women in leadership.

“When I started doing this kind of investing 17 years ago, it was hard to find other people who were ready to be in this conversation.”

As the additional supply of investible opportunities has grown, that has also influenced demand. As women and men who get it about gender equality and the opportunities to invest with a gender lens are starting to be more vocal, they’re pushing to see more product get created. So, it’s a two-sided market.

Ashburn: Now there’s opportunity to invest in things that we hope will improve the lives of women and girls. In the broader conversation around environmental, social and governance factors, or impact investing with the intentionality lens, a lot of people are saying that if you’re taking into account these different factors — gender being one of them — it’s better business. These will be better-run companies. How does that resonate with you?

Biegel: I’m spending a fair amount of time in Africa and south Asia right now. Whether I’m speaking with male or female business leaders, they’re telling me it just makes sense for us to have women in sales and marketing roles if we are marketing to women. If we are working with primarily women in the value chain, in the supply chain, then we should have women who are thinking about what are the barriers and opportunities for that workforce. If we are designing products and services where women are the primary consumers, it just makes sense to have women in roles of design and development of products and thinking about distribution.

Ashburn: To take that a step further, let’s say Dove body soap is not a women-only product but is often marketed to women. We wouldn’t necessarily expect a room full of men to better understand how to market that product to women.

Biegel: It’s not to say that a room full of men might not. But it is to say that if you are thinking from a user-centered design approach, you would be thinking not only what is it about the product, but what is it about how we speak to our consumer audience, where can they get it, are we respectful in how we’re portraying our target audience? We’d be taking all of that into account, so you’d naturally want to have diversity on the teams that are making those decisions.

Ashburn: You talked about the increase in investment products with a gender lens. What are some of those?

Biegel: On the macro level, we can be looking across all asset classes. The thing that I’m most excited about at the moment is where we can use private equity and private debt. We’re working on a research project here at Wharton that is focused on mapping the field around private equity and venture investing with a gender lens. When I tell them that, people think that I’m going to talk about maybe five or 10 or 15 funds that have that kind of approach. At the moment we’re tracking over 100.

They are domestic and emerging markets, they are very specific around particular sectors and themes, and they’re really thinking about where women are in the picture in terms of leadership. So, it’s a fund to invest in women entrepreneurs in Ohio, or it’s a fund to invest in women who are focused on high-tech, high-growth companies that are in cyber security and AI and deep tech and deep science. There really is a diversity now of structured vehicles that are emerging, and that’s really exciting.

Ashburn: While I understand that the private markets are a great place to have impact, there’s more in public markets in terms of scale of capital on the supply side. If I have more of my assets in that and I want to invest with a gender lens,

The post Gender Lens Investing: Why The Opportunities Are Growing appeared first on ValueWalk.

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