The harsh reality is that 96 percent of institutional assets under management are controlled by men. But evidence indicates female investors are stronger advocates for gender diversity in portfolio companies, and as such, more women in portfolio management could mean more women in leadership positions across the economy creating a “diversity multiplier effect.” This brief provides an overview of why expanding opportunities for women in finance is a passionate focus for WBC.
Why focus on women in finance?
- Men control 96% of institutional assets under management (Pitchbook)
- The 59 institutional female-led funds manage 4% of the total US AUM (Pitchbook and All Raise)
- Data has shown that men are more likely to invest in male led start-ups (Pitchbook)
- Female founders received only 2.3% of venture capital funds in 2018, down from 2.7% in 2017 (All Raise)
- Female-led start-ups constituted 15.7% of deals in 2019 (Pitchbook). Morgan Stanley estimates that VC’s could be missing out on as much as $4 trillion by not investing in more diverse founders
- The average deal size for a woman-led company in 2017 was just over $5 million vs $12 million for male-led companies (Pitchbook)
- In 2019 12% of VC and angel investor groups in the US had women in decision-making roles and 71% of venture firms had no female partners (Pitchbook)
So what can we do? We’ve partnered with an incredible group of organizations to drive change: 100 Women in Finance; Women in Fund Finance, SheEO, Private Equity Women Investor Network (PEWIN).
Together, we plan to engage with capital allocators and other influential leaders in the financial community to drive accountability for diverse boards and management teams, identify and celebrate investment funds including VC and PE firms with at least 20% female partners, and more.
We believe that through these actions we can see:
- The number of female-led institutional funds grows from 59 to 80 by 2025
- The percentage of AUM managed by female led funds rises from 4% to 10% by 2025
- The percentage of venture capital available to women founders doubles by 2025 from 2.3% in 2018
- The number of women partners in venture capital firms grows to 15% by 2025 from 2.3% in 2018