ImpactAlpha, Nov. 25 – The pandemic’s disproportionate impact on women is exposing the need and opportunity for more investors to embrace a gender lens. Yet of the tens of thousands of private investment funds worldwide, less than 200 strategically center women in their investment decision-making.
“COVID-19 is allowing us to pursue value creation strategies such as ‘gender smart’ investing,” International Finance Corp.’s Stephanie Von Friedeburg said on ImpactAlpha’s Call No. 25 last week. “There has never been a more opportune time.”
Hundreds of Agents of Impact ‘zoomed’ into The Call, where Von Friedeburg and more than a dozen guests offered up examples of how to center women across organizational structures, investment decision-making and portfolio management.
“We’re applying a gender lens investing strategy at both a firm level, within the business of DPI, and also within our portfolio companies,” said Development Partners International’s Takudzwa Mutasa.
With support from the global, women-focused 2X Challenge and U.K. development finance institution CDC Group, DPI hopes to set an example for other fund managers. The $1.7 billion Africa-focused private equity firm is the first designated “2X Flagship Fund,” which pegs capital from the 2X Challenge to specific gender commitments that are written into the investment terms.
Firms like DPI “have a critical role to play” in promoting gender equity, said CDC Group’s Nick O’Donohoe, who joined the call to launch “A Fund Manager’s Guide to Gender-Smart Investing,” produced with the IFC, to help more fund managers develop gender lens strategies. As the development finance and the impact investment communities begin to coalesce around “a harmonized set of metrics,” he said, “it’s very important that we can articulate in a consistent and coherent way what we’re doing.”
Pakistan-based Sarmayacar sought guidance from the IFC in framing an investment strategy that would address the lack of early-stage startup capital in Pakistan and women’s entrenched economic exclusion. The starting point: direct more capital towards the women-led businesses that exist already and “to businesses that might be led by males but have business models where income generating opportunities could be created for women,” said Sarmayacar’s Rabeel Warraich.
Inclusive value chains
Trade Depot’s Onyekachi Izukanne, in Lagos, shared how the inventory finance company is investing in women’s economic inclusion by focusing on Nigeria’s informal business sector.
“Three out of every four micro-retailers we serve are female-owned,” Izukanne said. Trade Depot only discovered just how women-led the informal retail sector is as it was on-boarding customers. “It became clear to us that to be successful, we needed to build for a largely female customer base.”
For Alitheia Capital, while the COVID lockdowns disrupted imports of essential foods and goods, they also presented an opportunity to help African businesses develop local production capacity, which would in turn fuel business growth, create jobs and make African economies less dependent on imports.
The Johannesburg-based fund applied its gender lens by “intentionally bringing in women into the supply chains,” said Alitheia’s Temilade Denton. “If you do not protect, empower and strengthen women’s role” and participation in the economy, she said, “the system is overall weaker.”