Gender lens investing funds have increased in relevance and number year by year in Latin America. From 2020 to 2021, the number of global gender lens investing funds increased by 49% (Project Sage 4.0). Despite this growth, the financing gap in Latin America and the Caribbean remains significant, reaching US$5 billion for women-owned microenterprises and US$93 billion for women-led small and medium enterprises (IDB, 2019).
During the panel “Gender Lens Investing Funds: Capitalizing on Change,” which closed out the second day of the GLI Forum LatAm, participants discussed how investment funds can incorporate the concepts of diversity, equity, and inclusion in their organizations, the main challenges they face when investing in women-led companies, how to support women entrepreneurs, and the importance and challenges of finding investors interested in gender lens investing when raising capital.
Moderated by Alberto Parodi, Investment Officer at IDB Invest, the panel featured representatives from investment funds located throughout Latin America and the Caribbean: Valerie Harrington, Fund Manager at Blue Orchard; Mariana Jimenez, Dealflow & Portfolio Manager at Amplifica; and Daniela Pacheco, Managing Partner at New Ventures.
Daniela Pacheco opened the conversation with a reflection on how educational programs that promote diversity and inclusion can improve the economic outcomes of entrepreneurs.
“The best performing companies are inclusive companies,” she said. “Our accelerator programs have had incredible results, with about 70% of companies committing to bringing women on to the executive team. We believe it is possible to create change through awareness and education for entrepreneurs and funds.”
Mariana Jimenez pointed out that one of the most significant challenges for funds is the representation of women in investment decision-making: “A study by AMEXCAP found that 20% of Mexican investment funds have a female partner, but they aren’t included in the investment committee or decision-making spaces. This is reflected in examples like the lack of investment in menopause research, an issue that only affects women. Capital has no gender, but the people who decide where to invest it do, and each person invests according to their problems and needs”.
Valerie Harrington added her perspective on the importance of ensuring that all diversity and initiatives are intersectional to ensure financial institutions can better address the needs of the most underserved populations, including Afro-descendant and Indigenous communities.
Mariana added that the objective isn’t to remove men from leadership positions but to add more women to activate the remaining capital and impact the other 50% of the population that doesn’t currently have a seat at the table and needs products and services.
Daniela commented that, although more opportunities are emerging in Latin America, there is still a long way to go to position gender lens investing not as a niche issue but as a core impact investing approach.
“We still have a long way to go,” she said. “The current goal for us as funds is to become more competitive and get those big funds that manage trillions of dollars to understand that they’re leaving a lot of money on the table, and they’re actually taking on more risk by not having diversity.”
Alberto agreed, adding, “As LPs in Latin America, especially when we talk about impact funds, we tend to think that investing with a focus on diversity and inclusion means sacrificing financial results when, in reality, one can achieve excellent results while generating impact.”
In closing, Valerie spoke about the future of investing in Latin America and the Caribbean and how the region is gradually maturing and is increasingly ready to receive more and new types of investment.
“We’re trying to mobilize private capital at a crossroads. In my work with public investors, we have seen that international aid and development funds see Latin America as a more mature region, and we see these funds migrating out of Latin America, going more to Africa or Asia,” she noted. “In my opinion, this is an important signal to the private sector that now is the time to invest in impact in their own backyard.”
