Catalytic Capital | May 6, 2024

Pension funds help catalyze gender-lens investments in Asia

Lisa Maria Braun

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Guest Author

Lisa Maria Braun

In the dynamic economic environment of the Asia-Pacific region, a significant investment opportunity is emerging: institutional investors’ capacity to champion gender equality through gender-lens investing while also securing financial returns.

Women-owned businesses face a global finance gap of $1.7 trillion. In growth regions like the Asia-Pacific, that gap hits female entrepreneurs disproportionately hard, given the prevalence of women-led businesses. 

Local fund managers, with their deep market knowledge, are among the best equipped to address this funding gap. Such funds provide an opportunity for institutional investors such as pension funds to play a key role in addressing the global gender finance gap while securing sustainable, profitable returns. 

Modeling catalytic investing

Pension funds, whose mandate to secure a promising financial future for workers, manage more than $35 trillion. Increasing calls to withdraw investments from fossil fuels and other “negative” sectors is putting pressure on pension fund managers to identify opportunities to redirect capital to environmentally and socially-positive sectors. This means that such institutional investors could ultimately determine the destination of innovative and impactful financing. 

A prime example of the transformative potential of such institutional investing comes from the Danish occupational pension scheme Paedagogernes Pension, or PBU. PBU committed $15 million to Sweef Capital, an independent impact investment firm based in Singapore that is at the forefront of gender-lens investing in Southeast Asia. Its anchor commitment catalyzed significant advancements for the first-time fund manager, including an investment in Teky Academy, a Vietnamese edtech venture providing multidisciplinary education for children, and an investment in USM Healthcare, a local manufacturer of cardiovascular products in Vietnam. Both are women-led businesses. 

The Sweef investment was a significant move for PBU and exemplifies how pension funds can contribute to gender equality while achieving sustainable returns.

“Sweef is probably the most targeted investment that we have towards gender,” says Rasmus Juhl Pedersen of PBU.

Through funds in Denmark or Norway, PBU has several investments in microfinance institutions serving rural women entrepreneurs in emerging markets. “We know from those investments that enabling access to small loans and enabling entrepreneurship is the best way to improve the overall condition of women and families. That also comes through in the approach that Sweef Capital takes in investing day to day,” he adds. 

Market makers

While fund managers like Sweef play a vital intermediary role in channeling capital women-led businesses, convincing institutional investors to support them—and to adopt gender-lens investing more broadly—is not without challenges.

“While there is ample evidence supporting the case to invest in women-led businesses, there’s still a perception of risk that we need to overcome,” says Sweef’s Jennifer Buckley.

“Our strategy is to apply private equity rigor and impact frameworks to demonstrate the multi-dimensional value [women-led] businesses deliver. That makes it tangible,” she explains. “We also take every opportunity to educate investors and the broader industry about the immense opportunities in Asia.”

To enable this market-building work, Sweef Capital secured technical assistance and a grant from the UN’s Economic and Social Commission for Asia and the Pacific, or ESCAP, via its Catalyzing Women’s Entrepreneurship program, funded by Global Affairs Canada. The funding supported the launch of Sweef’s Southeast Asia Women’s Economic Empowerment Fund, which PBU backed. 

Strategic collaborations like the one between ESCAP, Sweef and PBU are essential to overcoming gender-lens market hurdles and signaling overlooked market opportunities. 

Stepping up

The role of pension funds as catalytic partners of gender-lens investing cannot be overstated. When catalytic capital is invested in gender-lens investment funds and effectively reaches women-led enterprises, it showcases businesses’ viability and sends an encouraging message to cautious institutional investors. This can draw further investments, fostering the expansion and dynamism of the entire ecosystem.

PBU’s decision to invest in Sweef showcases how, by investing in women-led ventures, pension funds can do that while tapping into a source of sustainable, profitable returns. The example serves as a beacon for other pension funds to follow suit. 

Channeling capital with a focus on gender equality is necessary to respond to the needs of women and ensure that women-owned and -led businesses can innovate, compete and thrive in the Asia-Pacific region. Now is the time for institutional investors to embrace the gender-lens opportunity and leverage their immense assets to bridge the gender finance gap and foster a more equitable and sustainable economic landscape.

Lisa Maria Braun is a climate consultant at for ESCAP and is based in Bangkok.

ESCAP is committed to advocating for a future where gender-lens investing in the pursuit of economic inclusivity and equality is the norm. ESCAP’s Catalyzing Women’s Entrepreneurship program is hosting the second edition of its Feminist Finance Forum in Bangkok from May 7-8 to explore the role of institutional investors and the capital markets in gender-lens investing.