Cover Story: Going for equality
Gender lens investing has made much headway in the past few years. Today, there is a growing number of investment vehicles, such as mutual funds and exchange-traded funds, that utilise the strategy not only for the potential returns but also to promote greater gender equality.
This practice, which promulgates the use of investment capital to alleviate the economic plight of women and girls while earning a financial return, has existed unobtrusively for decades. It was not until the last five years or so that this approach started making its way to the mainstream.
Gender lens investments grew 41% to US$910 million as at June 30 last year, from US$645 million in 2016 and US$100 million in 2014. An analysis by US-based Veris Wealth Partners, in collaboration with Catalyst At Large, points out that growth in assets under management is a “powerful signal” that investors want more options when it comes to putting capital to work for the benefit of women and girls to create a thriving economy and equitable world for everyone.
Gender lens investing is sometimes seen as investing in female entrepreneurs. But that is not the only lens one can apply, says Shuyin Tang, a partner at social venture capital firm Patamar Capital. It is also the practice of integrating a gender analysis during the investment evaluation process to make better investment decisions so as to achieve better outcomes and promote gender equality.
Patamar invests in scalable businesses that improve the livelihood of the working poor. Its funds invest in agriculture, healthcare, education, financial inclusion and e-commerce/distribution platforms across Southeast Asia (with a focus on Indonesia, Vietnam, and the Philippines) and India.
The firm uses the principles of gender lens investing in its investment evaluation process. “We do not limit ourselves to investing in women-led companies but rather, ask gender-related questions at each step of the investment process to fully understand how gender plays a role in many areas. This includes macroeconomic factors, industry or sector dynamics, our own biases (if any) — a factor that our potential investee companies care about when making business decisions,” says Tang.
“We believe that it uncovers our and our potential investees’ blind spots and biases when it comes to the way we understand customers or stakeholders of an industry and the industry itself. By doing so, we are better able to understand the risks and opportunities of our investments.”
Patamar’s targeted investors are those excited about emerging-market opportunities and interested in backing scalable companies with measurable social impact, she adds.
Read the full article on The Edge Malaysia.