|U.S. Trust and Dallas Women’s Foundation hosted a luncheon and discussion of the emerging field of Gender Lens Investing on August 27, 2012. The event took place at The Crescent Club in Dallas. From left: Lenore Sullivan, co-chair and investment committee member, Texas Women Ventures; Roslyn Dawson Thompson, president and CEO, Dallas Women’s Foundation; Jackie VanderBrug, national adviser, Gender Lens Investing; and Jason Baron, senior vice president, U.S. Trust.
Chinese leader Mao Zedong proclaimed that “women hold up half the sky.”
It’s in that spirit that the growing phenomenon of “gender lens investing” is taking place.
Gender lens investing is the strategy of putting investment capital to work to improve the lives of women and girls, while at the same time seeking a financial return. It can come in the form of equity, fixed income, loans, venture capital and private equity.
It’s basically a viewpoint.
“Gender lens investing became a little more well-known in the ’90s, around microfinance,” said Jason Baron, a senior vice president at U.S. Trust and architect of its Socially Innovative Investment Portfolio. “Because those loans were predominantly to women for education and for cottage industry development, that was where it got its start.”
U.S. Trust, the Dallas Women’s Foundation and Texas Women Ventures recently presented a program on gender lens investing.
“It’s very much an extension of socially responsible investing,” said Roslyn Dawson Thompson, president and chief executive of the Dallas Women’s Foundation, one of 160 women’s funds worldwide and the largest regional women’s fund, with $26 million in assets.
Investment in women drives social change, leading to economic prosperity in communities, Thompson said.
That’s called the “women effect.”
“If you provide a woman one additional dollar in income, 70 percent of that dollar will drive back into her family, health care, education and the community,” Thompson said. “If you provide a man with an additional dollar, only 30 percent runs back into those channels. That is the fundamental element of the value of women as an economic entity.”
Women control about 80 percent of household purchases, Baron said.
U.S. Trust calls its strategy of investing in women and girls “Womenomics.” It conducts significant research on companies and how they “engage women as a constituency,” Baron said.
That includes evaluating policies on pay, training, career advancement, access to education, access to capital and family leave.
“On a full market cycle, we expect the returns of this particular strategy to look and feel like those returns of any other strategy, according to the same benchmark,” Baron said. “We don’t expect there to be the traditional expectation of a reduction in performance because of the incorporation of these social criteria.”
While funding for women-owned businesses has improved, more work needs to be done, said Lenore Sullivan, co-chairwoman of Texas Women Ventures.The Dallas-based family of investment funds is dedicated to investing in women-led businesses in Texas and across the Greater Southwest.
“Despite women creating more than half of the new businesses in the United States, they get less than 5 percent of the available pool of private equity and other capital that’s being formed for investment in the United States,” Sullivan said.
But things are improving, she said.
“The playing field is not equal, as we all know, but it’s getting a little bit more level,” Sullivan said.
People are starting to look at the merits of the business plans, “the typical business risks that you look at” and not focus on the fact that “it’s a woman who’s running the business,” she said.
“I think we’re getting past that finally,” Sullivan said.
Texas Women Ventures gets support from those who struggled to get funding for their businesses.
“Many of our investors, who’ve owned a business, started businesses, have said that one of their motivations for participating with us is their own struggles over the years in raising capital,” Sullivan said. “They feel like this is an opportunity to reverse that trend a little bit, to lend not only their money, but their advice and their time to women who are going through the same struggles they went through.”
Improving the economic prosperity of girls and the women they become is something we all should support.
From a social perspective, it’s the right thing to do. From an investment standpoint, it has tremendous potential.
“There’s a myth that if you invest with values, if you let your money do something bigger than just the fundamental numbers, that it’s going to cost your return,” Baron said. “Our experience is that is not the case. Thoughtful money management can incorporate these principles and make them true to your vision and values without having you come up with an external cost for that.”
Follow Pamela Yip on Twitter at @pamelayip.
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