Gender lens investing struggles to take off in Asia

Danish pension plan PBU may have backed a Southeast Asia women-focused fund for commercial reasons, but it is in a small minority of asset owners making such investments.
Gender lens investing struggles to take off in Asia

Gender lens investing (GLI) strategies are starting to proliferate in Asia, but asset managers are finding fundraising challenging for various reasons, including short track records, poor performance and concerns over the potential for so-called ‘pink washing’.

Johannes Bill Ladegaard,

Fund houses are keen to tout offerings that address gender issues or promote gender equity, given the intensifying focus on male-female equality. But a lack of agreed standards for how such things should be measured makes it difficult for allocators to make informed decisions in this area, as is still the case in the broader environmental, social and governance (ESG) investment universe.

Denmark’s Pædagogernes Pension (PBU), an occupational retirement scheme for the early education sector in Denmark, is one early mover. In January it made a $16.2 million cornerstone commitment to Washington, DC-based impact investment firm SEAF’s Women’s Economic Empowerment Fund (Sweef). 

The venture capital strategy focuses on female entrepreneurs and women-dominated sectors investments in Southeast Asia and is targeting a $100 million close.

GLI defined

Gender lens investing aims to address gender issues or promote gender equity, according to non-profit organisation Global Impact Investing Network.

The network groups GLI into three broad categories – those that invest in enterprises owned or led by women; that promote workplace equity in staffing, management, boardroom representation and along their supply chains; or that offer products or services that substantially improve the lives of women and girls.

GLI may also encompass incorporating gender considerations into the investment process.

Sweef marks PBU’s first allocation to a GLI fund, but the €11.5 billion ($14 billion) scheme has a track record of investing in women-led companies, microfinance and Asia.

From a commercial standpoint, the GLI rationale is that opportunities are overlooked because of unconscious bias that suppresses access to capital for women. Studies show that only 3% of venture capital (VC) funding globally goes to female entrepreneurs.

PBU agrees that this segment can deliver returns in line with regional PE funds with a similar risk profile.

“Our motivation for backing the fund [Sweef] was definitely commercial,” Johannes Bill Ladegaard, head of alternatives at PBU, told AsianInvestor. The retirement fund expects returns “in the mid- to high teens” net of fees and expenses from its investment, he added.

And this relatively niche investment approach appears to be gaining traction. As of mid 2020 there were 37 private and 10 public GLI vehicles targeting Asia and holding $1.4 billion between them, 63% of which were set up in 2018 or 2019, according to a report by the Sasakawa Peace Foundation.


However, such strategies are yet to gain much traction among the traditional institutional investment pool.

Women-focused VC and private credit funds such as Teja Ventures’s vehicle (targeting $15 million), Patamar’s $50 million Beacon Fund or Her Capital’s $15 million seed fund – all based in Singapore – have so far attracted capital from development finance institutions, angel investors and family offices. They don’t yet count pension funds or insurance firms among their clients.

Simba Marekera,
Brightlight Group

An executive at a large Southeast Asian sovereign wealth fund told AsianInvestor that the organisation was “some time away” from making any GLI commitments.

One key factor is the absence of a sufficiently long track record. Most institutional investors need to see at least a three-year track record before allocating and often avoid first-time fund managers, said Simba Marekera, an executive at impact investor Brightlight Group.

Moreover, the performance of women-focused private market vehicles does not compensate for this. The one-year returns of the 10 listed vehicles from June 2018 to 2019 ranged between -8.4% and -19.2%, according to the Sasakawa report.

A private fund manager cited disappointing performance of her pilot GLI portfolio: “Our target was a gross IRR of 25% and net returns in the high teens; we’re instead seeing returns in the early teens.” 

Whether affected by Covid-19 or not, such figures will hamper the progress of GLI, she said, suggesting it may be another five to eight years before the theme becomes mainstream.


Another key issue is a lack of agreed taxonomy for GLI. investors must make their own evaluations about the robustness of fund strategies. This raises concerns about gender lens washing or “pink washing” and adds an extra layer of complexity to the investment process. Similar issues with broader ESG strategies are only now being addressed through regulation.

PBU’s Ladegaard sees “gender lens washing” as a risk that could prevent the pension scheme from doing more GLI in the future. His team have come across funds that brand themselves as gender-focused but whose strategies show little or no evidence of improving female welfare.

Jennifer Buckley, SEAF

It does not help that, in a bid to prove to investors that investing in women is not done at the expense of returns, some fund managers appear to lump GLI together with the so-called ‘she economy’. This term broadly encompasses any business – male- or female-run – that specifically targets female consumers. Under this definition, high street fashion brands such as Mango and Zara fall within the realm of GLI.

Virginia Tan, founding partner of Teja Ventures, said an intention to target women allowed a company to fall within GLI by some definitions, even if said organisation had no particular gender focus at the time of receiving investment.

Ultimately if, given all these challenges, GLI strategies cannot raise substantial amounts of capital, they will continue to be hamstrung.

Jennifer Buckley, managing director of SEAF. “Insurance companies or pension plans diversification want to invest in funds that are $300 million to $500 million [in size],” she said.

PBU’s Ladegaard agreed: “We like the funds to be of a certain size so we can deploy meaningful capital.”

Yet his fund did deploy capital, and as asset owners become more ESG-aware, it seems likely that GLI will gain favour, given time.

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