Call Recording | September 30, 2022

Agents of Impact Call No. 45: Creative capital for gender-smart investments (video)

Jessica Pothering
ImpactAlpha Editor

Jessica Pothering

ImpactAlpha, September 30 – Capital to support women’s economic growth and financial inclusion is flowing – finally! – in many advanced economies. In emerging markets, many female fund managers still struggle to raise their first funds.

On The Call, fund managers from South Africa, Mexico and Tunisia shared their challenges in getting investors to value their expertise and investment strategies.

“We are overtrained and over-mentored and underfunded,” said Lelemba Phiri of Africa Trust Group, which is supporting women entrepreneurs and fund managers in South Africa. “We need the conversation to move from, ‘We believe in this and we think it’s something that can make a difference,’ to really putting your money where your mouth is.”

Mandate mismatch

Development finance institutions have helped unlock more than $10 billion for gender-lens investing in emerging markets through the 2X Challenge. Yet DFIs remain risk-averse when it comes to betting on first-time women fund managers.

“Just write the check,” said Anna Raptis, founder of Mexico City-based Amplifica Capital, which invests in women in tech. “Yes, some fund managers are going to do really well and some won’t. When you put that across an investment portfolio, you can turn out some very good results.”

Investor accountability

Economic development is driven by entrepreneurs and small and mid-sized businesses. Local institutional investors avoid such investments.

“Sovereign wealth funds and government pension funds are supposed to have a long-term view, they’re supposed to be thinking about where the market is going,” said GenderSmart’s Suzanne Biegel. “Hundreds of billions of dollars of corporate balance sheets. How do we start to unlock that?”

Phiri called for a rethink of the purpose of development finance.  “We need to make development finance a lot more accountable. I don’t think it’s good enough to just say that constitutions don’t account for it—the constitutions are written by people,” said Phiri. Of gender-lens investing: “If it’s a conversation about not understanding the asset class, then let’s have more conversations.”

Proof points

Hannah Schiff of Developing World Markets discussed lessons from the impact investor’s integration of a gender lens. Key insights: Built-in bias affects even companies with products intentionally designed for women, and even majority-female staffs require training to achieve gender-equitable outcomes.