Gender Equity Investing

The Future of Gender-Lens Investing: An Interview with Project Sage’s Authors


Gender-lens investing has exploded over the past two years in terms of number of funds and amount of capital allocated. And it’s no wonder why, as there’s a huge opportunity for investors to use their capital to make a real difference for women and girls.

That’s one takeaway of a new report called “Project Sage: Tracking Venture Capital with a Gender Lens,” produced by the Wharton School Impact Initiative. The report provides a snapshot of the current gender-lens investing landscape, with a breakdown of 58 funds that have raised at least $1.3 billion as of mid-2017.

In this article, we interview the study’s three authors: Suzanne Biegel, Sandra M. Hunt, and Sherryl Kuhlman.

An Opportunity for Institutional Investors to Be Bold

Ranging in size from $1 million to $400 million, the funds included in the report averaged $368 million, though the median amount was just $15 million. The relatively small size of many of the funds on the list makes any capital coming from institutional investors far more influential.

“There’s a unique opportunity for institutional investors to back these funds, which they may normally think of as too small to get involved in,” said Suzanne Biegel. “But this is a moment in time where we don’t get to have a third- or a fourth-time fund manager with $400 million under management, unless we back them in their first or second fund when they’re raising $30 or $40 million.”

Rather than balk at funds helmed by first-time managers or those with less than $100 million under management, Biegel said, institutional investors should consider them. “There is an opportunity to be bold.”

A Growing Trend

Biegel predicted that gender-lens investing will continue to grow in coming years as more women get involved in investing and take control of capital. The shift comes amid a cultural zeitgeist in which women are demanding that their voices be heard in industries and fields where they’ve historically been excluded or silenced.

As researchers continue to gather data on female investors and the returns offered by investments that directly benefit women and girls, capital will continue to flow that way. “There’s acknowledgment and recognition that gender is one of many valuable aspects to consider and one of many lenses that investors should be using to make their decisions,” said report coauthor Sandra Hunt.

Many of the funds profiled in the report not only promoted women and girls but also supported ethnic or racial diversity. That intersectionality may also appeal to impact investors looking for ways to deploy their capital to make a difference.

What the Future May Hold

“A lot more funds are going to come out,” Biegel said. “I think that more funds are going to wind up on the platforms of investment management firms that are hearing from clients that they want these types of product available.”

Despite the need to support these funds from the very beginning, there are investors who are hesitant to move until there is adequate data about results and returns. However, the authors are optimistic that richer data will soon be possible. “Some of this is just a matter of time. Many of these funds are so new that we just need more of them to exist and have time to develop products and start to sell them,” said coauthor Sherryl Kuhlman.

Biegel said that since putting together the report, she’s received phone calls from both fund managers whose funds appeared in the report and managers who are interested in improving their investments from a gender perspective.

“They all say, ‘We’d like to get better, can you help us do it or can you recommend someone that can help us sharpen our analysis?'” she said. “They really want to up their game on this.”

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