Investing in equity with a gender lens: a practitioner’s reflections
By Renee Martin and Manfred Bauer
Women are key drivers of economic and social growth. Their inclusion is essential for better business outcomes, yet in Australia the gender gap is getting wider. Here’s how gender lens investing can help change this.
In 2012 Alice Glenn and Elizabeth Barnett were looking for a welcoming community where they could establish their creative practice while juggling young kids. When they couldn’t find it, they decided to create their own – opening Melbourne’s most joyful, inclusive, and collaborative not-for-profit creative space, Schoolhouse Studios (SHS).
When we started working with SHS, we quickly uncovered the myriad of positive outcomes its spaces bring about for the community. In the past 10 years, this female-led organisation has brought together hundreds of creatives from the entire spectrum of the arts landscape. Giving them the space and confidence to be curious, experiment, fail and realise their full creative potential. But the impact of SHS doesn’t stop there.
“The wellbeing outcomes for individuals is huge,” says SHS Director, Hollie Fifer. “They have improved mental health, increased confidence, and feel more connected to others. This then impacts the SHS community itself, which has an impact on society as a whole.”
What is gender lens investing and why does it matter
While there’s no single definition or approach to gender lens investing, the practice falls under two broad categories according to the Global Impact Investing Network.
1. Investing with the intent to address gender issues or promote gender equity
This includes investing in women-owned or -led enterprises, like SHS or organisations that promote workplace equity or offer products or services that substantially improve the lives of women and girls.
2. Investing with specific approaches to gender issues
This could mean having a process that focuses on gender, from pre-investment activities (e.g., sourcing and due diligence) to post-deal monitoring (e.g., strategic advisory and exiting).
Or developing a strategy that examines the organisation’s:
vision or mission to address gender issues
structure, culture, internal policies, and workplace environment;
use of data and metrics for the gender-equitable management of performance and to incentivise behavioural change and accountability; and
financial and human resources commitment to gender equality.
Women’s participation in the workforce has incredible economic and business benefits. From a 26% boost in annual GDP to increased profitability for enterprises, 1 investing in women simply makes sense.
A large volume of literature also shows that investing in the potential of women has disproportionally higher social returns because of the follow-on effects in areas such as healthcare and education.
Yet the Global Gender Gap Report 20213 found that globally we’ve taken a step back since 2020 in reaching parity. This is perhaps no surprise, as female social entrepreneurs have continued to be systematically excluded from being widely acknowledged as successful by the mainstream.
And while there is increasing interest from investors – with even roadmaps to support process – there has traditionally been a limited pipeline of investment opportunities.
Supporting women in leadership
There is a clear shift in gender opportunities in the market, showcasing strong performance, diverse leadership skills, deep interest in new paths for collaboration and a nurturing approach to talent development. So how can we best support women to continue to blaze new trails?
While Sefa is not explicitly a gender lens investor, we have been successful in deploying capital and providing capability support to female-led purpose-driven organisations, like Schoolhouse Studios.
How has this happened?
We believe it’s to do with how we work.
Challenging real and perceived barriers is built into how we operate - from challenging the need to be finance first, to reinventing structural frameworks and supporting other changemakers.
Sefa is also female led, with women making up over 80% of our Board, Investment Committee and team.
We have always championed female leaders.
More than half the loans we’ve written have been for female-led or female co-led social enterprises (representing an investment of just over $24 million) – and 70% of our capability building engagements have been with organisations with female leaders.
And, of the more than 150 organisations that have participated in our accelerator program for early-stage social entrepreneurs, 70% were led by women.
We also support women as disruptors. Backing and nurturing determined and disciplined female leaders to be confident in their leadership skills so that they are maximising impact - whether this is through providing finance or working closely to help discover more sustainable ways of working.
The secret to successful gender lens investment
Over the years and millions in investment, we’ve noticed a couple of things that have allowed us to successfully support female leaders on their journey.
Our culture respects and promotes diversity and diverse thinking and allows us to be accessible and empathetic. We’re purposely deliberate with language that does not assume a background/experience with finance, for example, and our team titles convey more about human relationships rather than transactional ones (Social Finance Relationship Manager rather than Investment Manager).
We are very intentional with how we screen potential clients, considering gender as part of the process. Promoting and recognising financial education and business acumen as a strength are also important in how we structure deals and conduct our investment readiness process. Helping empower women to drive change in, or in the case of Schoolhouse Studios, create their own communities.
Size isn’t a barrier. We help organisations with funding needs from as little as $100,000 to $2million. And we support clients across every stage - from early-stage incubation and capability strengthening to early investments of working capital and funding for growth and impact.
Trust and transparency are critical to creating successful relationships and partnerships – and these take time. So we’re patient. We walk alongside our clients until they’re ready. Sometimes this takes months, sometimes years.
We’re also an organisation that focuses on learning. We’ve been around for over 10 years and have developed a deep understanding of investors, investees and the sectors we work in – from affordable housing and education to health and wellbeing. But this doesn’t mean we stop learning and growing.
A change is in the air
We’re proud to contribute to an ecosystem that is working to inspire and nurture changemakers.
Whether it’s gender or other underrepresented groups, we want to create new opportunities in investing for equity. And help build resilience, mitigate risk and unearth under-served opportunities in an uncertain market. That’s the power of gender lens investing. And it’s time for change.