Gender lens investing represents one of the fastest-growing areas within the impact investing world and refers to the practice of investing for financial return while also considering the benefits to women. Investments made with a so-called “gender lens” range from funding women-owned businesses, businesses with a strong track record of employing women, or companies that improve the lives of women and girls with their products and services. The investment thesis of the Women’s World Banking Capital Partners Fund, a $50 million women-led impact investment fund, combines all three of these approaches to achieve the greatest possible social impact without sacrificing financial returns.
WWB Capital Partners is a private equity fund that makes direct investments in financial institutions that not only serve women clients with products and services that meet their needs, but which also demonstrate a commitment to gender-diverse leadership and governance. There is overwhelming data demonstrating that diverse companies deliver superior financial results. A growing body of evidence indicates that those financial institutions with significant numbers of women in their leadership and governance tend to serve more women clients. For example, among the financial institutions in the Women’s World Banking Network, those with more than 35% women board members, managers and staff have a higher Return on Assets and serve significantly more women clients. Building gender diverse financial institutions is an important means to deliver on our larger objective: providing financial services to the more than 1 billion women around the world who are excluded from the formal financial system.
Potential investees must meet basic investment criteria for client outreach, service quality, profitability, and efficiency and risk indicators. They must also demonstrate a commitment to, and history of, reaching women clients and having gender-diverse staff and leadership. Since the Fund began investing four years ago, we have placed women directors on all investee boards and many investees have sent their high-potential women leaders to our acclaimed Women in Leadership program. Portfolio companies report on gender performance indicators (i.e., percent women clients, growth in women clients and women client retention.) This is often the first time that these companies have provided financial performance data disaggregated by gender and many of them report an enhanced ability to tailor products for clients and incentives for staff in a more targeted way as a result. The Fund is also able to use this data to advocate for changes in corporate policy or marketing strategy.
The Fund ranks in the top quartile amongst funds of its vintage according to Cambridge Associates and our aim is to demonstrate superior returns and a strong business case for investing in financial institutions that, in turn, invest in women clients and leaders. By using our platform as an investor, we have been able to effect change in a far more sustainable way than in our previous role as a well-intentioned NGO partner. Through WWB Capital Partners, we hope to inspire others to invest in financial institutions through a similar gender lens so that all women will have access to the financial products they need to achieve both security and prosperity.