ImpactAlpha, March 9 – Expanding women’s access to education, healthcare and economic opportunities is the key to ending poverty and strengthening communities, especially in emerging markets. Who can help do that? Female fund managers, who are apt to invest in female entrepreneurs, who have been shown to deliver greater impact on women and their communities.
Women-led investment teams are significantly more likely than male-led teams to invest in women founders. But women control less than 3.5% of investment capital. At least partly as a result, women-led ventures attract less than 3% of invested capital.
Local capacity. WIC Capital, in Dakar, Senegal, was founded by a group of 80 local professional women who each committed their own capital to prove the women’s investment opportunity (see, “How local early-stage funders are finding impact alpha in emerging markets”). Even before raising funding from outside investors, WIC has pooled $1 million to invest in local women-led businesses, only 3.5% of which raise funding beyond immediate friends and family; the rest represent “a vast untapped source of job creation and economic growth” according to WIC. The fund is leading a €330,000 ($377,000) investment in E-cover, which repurposes used tires into rubber granules to be used as turf in building and infrastructure projects. The startup is purchasing an industrial recycling facility and expects to create 25 local jobs.
Gender lens investing. The U.N.’s Economic and Social Commission for Asia and the Pacific selected Small Enterprise Assistance Funds to launch the SEAF Women’s Economic Empowerment Fund in Southeast Asia and expand SEAF Bangladesh Ventures, which together are expected to mobilize $150 million for small and growing businesses. The U.S. International Development Finance Corp. has built Africa and Latin America tracks in its 2X Women’s Initiative to directly invest in “businesses and funds owned by women, led by women, or providing a good or service that intentionally empowers women.” The Aspen Network of Development Entrepreneurs’ $1.2 million Advancing Women’s Empowerment Fund, backed by USAID and the Visa Foundation, will next month make eight awards to initiatives with innovative approaches for boosting investments in women entrepreneurs in South and Southeast Asia.
Public equities. Veris Wealth Partners updated its tally of public-markets gender-lens funds and found $3.4 billion in gender-lens investing products as of last June 30. That’s up from $2.4 billion a year earlier. Ten of the investment products reported assets of over $100 million; six had more than $250 million. The gender lens market is still primarily a North American phenomenon, Veris said, but noted there are eight public-market gender-lens funds in the Asia-Pacific region, two in South America and one in Africa.