Learning about LP’s Perceptions on Gender Lens Investing

GOALS OF QUALITATIVE RESEARCH 

Investing in Women (IW), an initiative by the Australian Government, focuses on accelerating women’s economic empowerment across Southeast Asia. One focus area is gender lens investing, Propelevate is a market building partner, supporting limited partners investing in venture capital, to increase investment in funds and businesses that disproportionately benefit women across the target countries of Indonesia, the Philippines and Vietnam.

Propelevate is taking a behavior-change approach to the market building work and therefore needs to better understand what it would take to increase the number of limited partners (LPs) who are engaging in Gender Lens Investing (GLI) as well as the depth and breadth of LPs already engaging in GLI. This research serves as a baseline of current LP GLI in the region, supplementing more quantitative research done by others, and will inform the design of Propelevate’s specific behavior change activities. The data collection will cover investment strategy, sources of information/influencers (e.g., thought leaders, news sources, conferences, peers, etc.), and orientation toward GLI and what it would take to change their perception and engagement. 

In March - May, 2024 Propelevate conducted in-depth interviews with LPs who work in Southeast Asia in some way.

Respondent demographics:

• 9 were female, 5 were male;  

• 4 represented development finance institutions (DFIs), 4 fund of funds, 3 family offices, 2 foundations, 2 institutional assets managers (some people worked at more than type); and

• 7 were based in Asia, 4 in the US, and 3 in Europe.

KEY FINDINGS

1. Impact Investors are most likely to engage in conversations about GLI.
   All but one respondent to our request for interviews on GLI identified as an impact investor. This was reconfirmed by those that did respond; investors see GLI as part of ESG, impact or DEI. They also often view GLI as limiting their opportunities.

2. GLI work is happening but not often at the level of a condition of investment.
   Most of the GLI work being done by LPs centered on gender-tagging or gender-flagging investments (aiming for at least one gender-intentional action or commitment) or data collection. None used gender as a condition of investment.

3. How GLI applies to LPs is different than for GPs.
   Much of GLI work to date has focused on General Partners (GPs), however GLI definitions and lenses differ for LPs. Shifting perspective to women on investment teams and women-led funds can help LPs see their role in GLI.

4. Bias or outright sexism impacts investment strategies and perceptions.
   There was an awareness among some that the default practices that the investing community uses were created by (mostly) white men from the Global North and these have not been questioned. This includes how one evaluates risk, how one judges the competency of investees, how one measures the time they invest in supporting investees, whether one sees women as an additional/ignored half the world or as a new group competing with the existing one (i.e., men), and which factors determine fund manager compensation, fees and carry. Bias is also reflected in the view that women-led or founded firms need to outperform their male peers, so if one women-led firm fails, it is generalized to “oh, all women-led firms fail” rather than acknowledging that many male-led firms do too. 

5. The term GLI was not always useful in creating momentum.
   GLI was often considered niche, limiting, and requiring a sacrifice of financial returns.

6. Tools and Information may not be enough.
   Thinking about their identified determinants through a COM-B framework (Capability, Opportunity, Motivation - Behavior), the research surfaced more issues surrounding motivation and opportunity than in capability, suggesting that traditional approaches of sharing information and tools may not be sufficient at this point.

Please contact Propelevate if you’d like more information about the research