Gender-Smart Investing: More than two dozen new funds investing with a gender lens

ImpactAlpha, October 17 – I’m getting calls regularly from people who are starting new funds or who want to reshape the funds they already have to include a gender lens. Many of the funds featured in Project Sage last year have raised a lot more capital.

Catalyst At Large and the team at Wharton Social Impact Initiative are starting work on Project Sage 3.0, our ongoing global scan of private equity, venture capital, and private debt funds that incorporate a gender lens in their investment strategy.

Already, we’ve tracked at least two dozen new funds, which will be part of the new Project Sage report next spring. Here’s a sneak peek at a selection of the exciting and innovative new funds emerging in the field of gender-smart investing. Note: These are not recommendations, and do not reflect any preferences among funds that will be featured in next year’s report.

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Gender-smart investing has product and momentum. Now it’s time to move the money.

2019 has continued to see growth in the gender-smart investing sector, from the number of products and platforms available, to the steady flow of actors across the capital spectrum saying this is explicitly part of their strategy.

But there is still a disconnect between the number of people who say that gender diversity matters to them, and the amount of capital that is moving to gender-smart products and platforms. Assets under management are not going up fast enough, and fund managers I talk to are still taking longer to raise the funds they need to get to a first close. If you’re rockstar fund manager or a super high growth star, you’re doing fine. But there is a lot of money sitting on the sidelines, whether they’re waiting for the political or economic climate to stabilize, or just waiting to be the last one in. For a lot of people working in the gender-smart investing arena right now, there is a real sense of frustration. We’re building the product, the relationships, and the infrastructure we need, but the capital isn’t flowing.

This week, I’m in Amsterdam for the Global Impact Investing Network’s 2019 Investor Forum, where I’ll be leading a workshop on gender-smart investing as part of a diversity and inclusion track. As I prepare for the event, I’ve been reflecting on this contradictory state of affairs: the energy behind gender-smart investing and the creative products and partnerships emerging in the field, and the work that is still to be done. Here are three things I’m inspired by… and four challenges we still need to overcome.

What’s working: The market opportunity is exploding.

Even as recently as three years ago, allocators interested in moving capital in gender-smart investments would say there wasn’t enough product available. This is no longer the case. There are now more than 100 private equity, debt, and VC vehicles with a gender lens mandate, and between 2014 and 2018, investments in public markets grew from $100 million to $2.4 billion. Even more big players are coming on board, like Fidelity, which launched its Women’s Leadership Fund in May, and investors, corporates, and philanthropists are starting to look deeper at the role of gender in meeting their ESG goals. And the work accelerators and networks like Springboard (arguably one of the godmothers of this work) and others have been doing for the past 20 years to build the pipeline is paying off. There are no shortage of investable businesses: from explicitly gendered industries like FemTech, to gender-neutral or traditionally masculine industries where entrepreneurs are smartly targeting women — think 37 Angels’ recent investment in craft beer company Talea Beer.

What’s working: Public-private partnerships are getting more hands on deck.

DFIs and development agencies are leveraging their influence to catalyze new types of partnerships, bringing together diverse players with different types of capital and resources for a bigger whole. Just over 12 months after its launch at the 2018 G7 summit, the 2X Challenge has already mobilized $2.47 billion of its $3 billion dollar goal of investing in women, demonstrating the power of gender-forward foreign policies and the wealth of companies and vehicles to invest in. In June, OPIC announced it was teaming up with Merck for Mothers, USAID and Credit Suisse to invest and mobilize $50 million for maternal health solutions in sub-Saharan Africa in the MOMs initiative. Canada’s Equality Fund is combining gender lens investing with feminist grantmaking and philanthropy for an all-hands-on-deck effort to realize gender equality in Canada and around the world. These partnerships are inspiring people with their creativity, demonstrating the power of investable, self-sustaining solutions in arenas that were previously thought of as philanthropy only.

What’s working: Investors are calling on funds and asset managers to do better on their own diversity, equity, and inclusion.

Even when they aren’t ready to gender diversify what their funds are invested in, investors are increasingly looking for diversity when it comes to who is managing their money. There has been a big push over the last 12 months for increased diversity amongst fund managers, asset managers, and portfolio managers partly born out of the knowledge that diverse teams outperform and have lower risk profiles than all male teams, and partly because it’s an area where gender conscious clients feel they can make an impact. This push isn’t solely about gender diversity, either: it comes with an intersectional frame and increasingly combines gender, race, and ethnicity.

Challenge: We still need more product.

Despite the growing array of options available to people wanting to invest with a gender lens, we still don’t have products in every shape and size to match investor demand. Some allocators express frustration that the public market products don’t go far enough on impact, but we can do more by engaging with public companies through the best of those vehicles and keep pushing to make them better. Private equity and VC, which can get more targeted, doesn’t have the liquidity and risk profile many investors say they need. There also might be a vehicle that is attractive in every other way, but the minimum investment is too high for individuals or the size of the total fund is too small for institutional investors. In other cases still, an investor who may not be able to find a gender-smart product within the particular region or sector they focus on. These challenges aren’t exclusive to gender-smart investing: in many cases, they’re issues across sustainable and thematic investing more generally.

Challenge: False choices within the impact investing sector.

At the same moment that investors are paying more attention to gender, people are also waking up and paying more attention to critical issues such as climate change and racial equity. Some investors may view this an issue of competing priorities: Which of these important issues should I direct my capital to? Or, if I put more capital in investments, will I need to do less philanthropy? But these are false choices. Many investors recognize that no issue can be addressed in a piecemeal way: that women are at the forefront of the climate and racial justice movements, and we have an opportunity to solve for gender equality, racial justice, sustainability, and other issues in a more integrated way. Think funds like WaterEquity, which has brought a gender and climate lens to its focus on delivering safe water and sanitation, or Illumen Capital and others, which exemplify an intersectional approach not only in who is running the fund, but what they’re investing in.

Challenge: The political and economic climate has big money feeling stalled.

Many investors are in a state of paralysis right now, watching and waiting to see what’s going to happen with the political and economic climate. Whether people are trying to raise $10 million or $100 million, they’re all being impacted by the same molasses. If a recession is coming, I’d better not do anything new. If Brexit happens, I’d better conserve my cash. The result is that many individuals, foundations, and corporates are sitting on large pools of capital, while fund managers are taking longer than anticipated to get to a first close. But if a downturn is coming, this is exactly the time to diversify our investments. If the market currently favors the status quo, some women-owned or -focused funds or businesses may be countercyclical, and a source of resilience, in periods of disruption. What got us here is not necessarily going to get us there.

Challenge: We need allocators and investors to start being bolder.

Whether it’s policies against investing in first-time funds, or waiting for a fund or entrepreneur to raise most of their capital before investors make a move, many of the obstacles to gender-smart investing come down to the same thing — a reluctance to make bold decisions. I don’t want to say we need to take more risks, because it’s not necessarily riskier: a 2018 report from Preqin found that first-time funds have historically outperformed funds by more established managers, and businesses with more women in leadership have been shown to have more stable returns. Concerns about deal flow are overrated: where capital is available, investors are finding no shortage of investable vehicles and businesses. But biases about what constitutes an investable vehicle or business persist. If we want to move capital in a volume and speed that truly makes a difference in the lives of women and girls, and helps to achieve gender parity, we need to be more courageous in challenging those biases: to stop focusing the obstacles, and start focusing our attention on the ways we can overcome them.


For those of us who have been building the infrastructure, the product, and the partnerships to help achieve that parity in the investment industry, these can feel like frustrating times. We’re ready for lift-off, and change isn’t happening fast enough for a lot of us.

But the work we’re doing right now is essential. We’re taking the time to work through what “good” looks like, in terms of process and in product. We’re figuring out what real gender integration looks like, beyond just counting women. We’re laying the foundations needed to transform institutional barriers that have been built over hundreds of years.

None of this work happens quickly, especially in a moment of political and economic uncertainty. But when the energy flips again, it could flip very fast. You can’t know in advance when that’s going to happen. What you can do is build the containers, the foundations, and the infrastructure we’ll need to take action when it does.

We need to be consistent, resilient, and keep moving forward in the face of inertia or internal resistance. To borrow from the writer William Gibson: the future of investing is already here, it’s just not evenly distributed. What will it take to shift mindsets and get moving? Who is in?

How to Invest in Girls and Young Women: Lessons from SPRING Accelerator

Six years ago, colleagues at the UK’s Department For International Development and the Nike Foundation’s Girl Effect team came me to with their idea for what would become the SPRING Accelerator. The aim was to identify and support businesses that could improve the lives of adolescent girls and young women - whether as leaders, consumers, or otherwise. We wanted to use human centered design (HCD) to build a base of examples that would help investors see that businesses that focused on women and girls were smart bets.

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How to invest for a gender equitable world: a 15-step guide

I started investing in women and girls in the early 2000s, after I successfully exited the company I helped to build. As an entrepreneur myself, I was familiar with the challenges women founders face. Too often, they are underestimated, unseen, and undercapitalized - you’re probably familiar with the statistic that women have received just 2.2% of venture capital in the US and even less in other places in the past several years. I wanted to use my capital to back not only women entrepreneurs but also businesses that are good for women and girls.

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Project Sage 2.0: Social impact funds with a gender lens

In January, Wharton Social Impact Initiative and my firm, Catalyst at Large, released Project Sage 2.0, a global scan of 87 private equity, venture capital, and private debt funds that explicitly incorporate a gender lens in their investment strategy.

Over the coming weeks I’ll be sharing with you what I believe are some of the most interesting themes to emerge from the study.

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Project Sage 2.0: The rise of the intersectional venture fund

In January, Wharton Social Impact Initiative and my firm, Catalyst at Large, released Project Sage 2.0, a global scan of 87 private equity, venture capital, and private debt funds that incorporate a gender lens in their investment strategy.

Over the next couple of weeks I’ll be sharing with you what I believe are some of the most interesting themes to emerge from the study, starting today with the way that new forms of diversity are showing up in investment criteria — or as I put it in the title of this piece, the rise of the intersectional venture fund. (The views expressed here are my own as Catalyst at Large, and not with my Wharton Social Impact Initiative hat.)

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Systems Mapping as a Tool for Systems Change in Gender Finance

As a connector and catalyst in the gender finance space, I know that moving more capital, more strategically, in a gender-smart way requires not just influencing individuals and institutions, but shifting systems: of government, state finance, civil society, banking, shareholders, information, public discourse, and more.

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Finance as a Tool for Social Change and Gender Equality (Women Deliver Op-Ed)

The first ever Gender-Smart Investing Summit will take place in London this November. Leaders will come together to address how to deploy more capital, more strategically, with more velocity to achieve gender equality and to use finance as a tool to address issues that disproportionately affect women and girls.

Investing can be viewed as a lever in to drive policy interventions, public sector shifts in procurement and budgeting, philanthropy, media and culture, and even shifts in business behaviour. This concept isn’t new. Impact investing has become popular by fuelling investments with both social and economic objectives. Take it a step further, using a gender lens means being intentional about the gender factors and outcomes in financial decisions in order to make investments that are smarter and more impactful for women and girls.

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Fixing venture capital for women entrepreneurs

This article is part of a Special Series titled How to #PressForProgress in Women’s Entrepreneurship by the Cartier Women’s Initiative Awards. The series contributes to the #InternationalWomensDay dialogue on empowering women around the world through entrepreneurship.

The shame of #metoo aside, venture capital (VC) is broken at a systemic level. Even if huge amounts of capital started shifting towards women tomorrow, it would take years to close the $300 billion funding gap. 

VC is working for some women entrepreneurs, don’t get me wrong. I recently wrote about 58 funds with an explicit gender lens in collaboration with Wharton Social Impact Initiative.

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