Is smart money on gender investing?

04 August 2021

It has been proven that long term value creation of companies is enhanced by having a larger share of women in senior positions.

Gender smart investing appears to be promising to unlock the world’s economies and empower both men and women, and Asia seems to be at the forefront of this emerging trend.

The pandemic may have wreaked havoc on gender equality, but it has also accentuated the contribution women make to the global economy. According to Harvard Business Review, women make the majority of consumer decisions: 94% of furniture, 92% of vacations, 91% of homes, 60% of cars and 51% of consumer electronics.

The Asia Foundation, which works across 18 countries in the region, believes the more women that participate in an economy, the more successful that economy.

It pointed out that the COVID-19 pandemic has shown the necessity of resilient and sustainable supply chains. The foundation believes these can be achieved by diversifying and appropriately financing scalable, diverse, local, women-owned, women-led, and women-impacted businesses.

It is urging investors to take a gender-smart approach and target companies with business policies and strategies which address the social issues that prevent women from achieving social and economic equality.

Gender investing – information is power

In summer 2021 Aberdeen Standard Investments Research Institute, a UK-based global fund manager, launched its Gender Equality Index.

The index scores countries across a wide range of economic, policy and ‘empowerment’ factors. While it only tracks 29 economies, there are hopes that its existence could encourage more gender smart investment initiatives.

Stephanie Kelly, deputy head of the Aberdeen Standard Investment Research Institute, said the aim of the index was to identify economies likely to benefit from greater gender equality. “Because quite simply they will have better economic outcomes and could offer better investment opportunities.”

Asia: a territory becoming gender smart

The region has huge potential to progress gender smart investing. Credit Suisse has identified Asian economies (excluding Japan) as likely to grow more than those of any other region, an estimated 7.5% during the rest of 2021.

In Asia, the number of high-net-worth individuals and ultra-high-net-worth individuals is 15.6 million and 57,318 respectively; by 2025, Credit Suisse estimates this will have grown to 26.7 million and 99,000.

China is leading Asian wealth creation with 5.3 millionaires in 2020, a growth second only to the U.S.

Interestingly, CapGemini found that Asian companies were more likely than other regions to take a philanthropic view of investing, seeing it as a tool for social and economic change. This may explain why the region is being targeted by Western investment companies who are beginning spot the potential in helping to empower women in the region.

For example the Danish pension scheme PBU became the main investor in the official launch and first close of the Southeast Asia-focused SEAF Women’s Economic Empowerment Fund (SWEEF).

PBU, an occupational pension scheme for teachers, invested 100 million Danish krone ($16.2 million) to the fund, which has a women-centered, Southeast Asia-focused investment strategy primarily in Vietnam, Indonesia, and the Philippines.

The fund follows the success of the SEAF Women’s Opportunity Fund (SWOF), which has invested in six women-led and/or women-owned businesses in Southeast Asia, including Ellana Cosmetics, a Philippine-based cosmetics startup.

This follows other gender smart investing initiatives, in March 2019 Bank Rayatt Indonesia (BRI), Indonesia’s largest bank, issued the country’s first sustainability bond.

The bond raised $500m and was more than eight times oversubscribed. Proceeds have been used for affordable housing, job creation, socio-economic development and empowerment, and environmental improvements such as green construction and clean transportation.

How ZEDRA can help

Women are wielding significant power and influence in business, and their ambitious, entrepreneurial spirit is widely welcomed.

We are seeing an increasing demand for multi-faceted services that extends beyond services associated with private wealth to often complex corporate structuring and other areas of active wealth.

A business owner doesn’t only need corporate solutions, nor do they only need solutions focused on bankable financial assets: they need to be able to pick and choose from both, depending on their specific situation. We are excited to be helping more female billionaires, and we are proud to offer services that span their unique requirements.

For more information, please contact Jacqueline Shek.

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