The Private Equity Women Investor Network (PEWIN) has launched the #HerWorth challenge in a bid to spur investment in female-led funds. The campaign was announced this week during the #IWD2020 #EachforEqual campaign. It will officially be launched with global partner organisations on 18th August 2020 on the 100th anniversary of the ratification of the 19th Amendment, which finally guaranteed women’s right to vote in the United States.
“It took women 144 years from the Declaration of Independence to get the right to vote,” said Elizabeth Edwards, member of PEWIN and Managing Partner of consumer venture fund H Venture Partners. “It’s time they have the right to invest. It’s time to vote with our wallets.”
According to Morningstar, nine out of 10 fund managers are male. So when Kim Jordan, a recently retired senior R&D executive at Procter & Gamble, asked her financial advisor how much of her portfolio was managed by women, she was shocked to hear that his answer was ‘zero’. “The goal is to raise awareness among retirees and investors like Kim Jordan – and to highlight to large institutions that investors like Kim – their clients – care about this issue,” pointed out Edwards.
#HerWorth CHALLENGE
The #HerWorth challenge is simple. Participants simply ask their financial advisor, ‘What percentage of my portfolio is managed by female fund managers?‘ – and post their results online with the hashtag #HerWorth. Then they challenge three others to do the same. By simply asking the question, co-CEOs the PEWIN Kelly William and Kate Mitchell hope that the new initiative will highlight the fact that investors care about gender parity. Both believe it will ‘spur investment in female-led funds’ and ‘have a trickle-down effect into venture capital and private equity, female founded companies, public boards and even politics’.
Participants can point their financial advisor to female fund managers some of which are listed at 100 Women in Finance, PEWIN and All Raise among other sources or ask, ‘What female-led funds can I invest in, specifically funds like private equity, venture capital, real estate, hedge funds and mutual funds?’
INVESTING IN GENDER PARITY
“Women will control two-thirds of the wealth over the next 10 years,” stated Williams. “If we want to see gender parity in the investment community, as well as other parts of society, we have the opportunity to use our investment portfolios to demand the expansion of the market.”
According to joint research by Pitchbook and All Raise, 87% of venture dollars are controlled by men and only 14% of venture dollars were invested in female founders. These statistics have budged only slightly over the last 20 years, and groups like All Raise and VentureForward hope to change that.
SMART INVESTORS
“The data is clear that it is not just good but smart to build diverse investing and management teams,” added Mitchell. The International Finance Corporation did a study of over 800 funds and found gender balanced private capital teams outperformed the 70% of firms with all-male leaders by 10-20%. A study by First Round Capital found that companies with a female founder performed 63% better than their investments with all-male founding teams.
Large investors globally are also focused on the diversity of fund managers. The Institutional Limited Partner Association (ILPA) has taken the step of adding diversity to its due diligence guidelines and sharing what it sees as best inclusion and diversity practices among fund managers (as reported).
The #HerWorth challenge costs nothing and may even improve investment outcomes, according to the PEWIN co-CEOs. PEWIN is a membership organisation for senior women in private equity from endowments, foundations, pension plans, fund of funds, family offices, venture, buyout and mezzanine firms, consultants, and select advisory firms. It provides opportunities to network, share ideas and make deep connections between peers, and works to empower women to succeed at the highest levels in the private equity industry.
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