In fact, research from IFC shows that private equity firms at which women comprise at least 30 per cent of the investment decision-making team achieved 10 to 20 per cent higher rates of return than those in which women were not well represented.
Without women occupying those positions, female-founded businesses end up missing out on investment. According to IFC, female investment partners invested in almost twice as many female-led businesses as male investment partners.
Given that around a third of UK entrepreneurs are women, there’s certainly no shortage of entrepreneurs who could use investment. These are the same entrepreneurs, by the way, who are constantly touted as the engines of innovation, job creation, and economic growth.
According to a study by the Boston Consulting Group, if women participated equally as entrepreneurs, the rise in GDP across the world could be between 3 per cent to 6 per cent.
While the UK economy may have bounced back post-Covid, no one could rationally turn down that kind of additional growth.
Great female leaders
For anyone willing to look, it’s also not difficult to find great female entrepreneurial leadership. A good example of this kind of leadership from within our own portfolio is RunwaySale.
Led by co-founder and chief operating officer Elmien Hammerschmidt, the South African ecommerce retailer employs nearly 150 people, 77 per cent of whom are women.
When we decided to invest more than US$5m in 2020, Hammerschmidt’s leadership and passion for the business she’d built up were significant factors.
That focus on leadership proved to be prudent when COVID-19 struck and e-commerce activities in South Africa were severely curtailed.
Hammerschmidt guided the company through this particularly tricky time, overseeing its expansion beyond fashion and into homeware and other categories.
The results speak for themselves. Whereas RunwaySale was previously competing with a small cohort of other online fashion outlets, it’s now competing with traditional brick-and-mortar stores.
A better future
I guarantee you that there is no shortage of women entrepreneurs like Hammerschmidt in the UK and around the globe.
Investing in them won’t just help close the gender wealth gap; it also means more taxpayers to fund government education and healthcare initiatives that benefit girls and women.
It would be fatuous for me to say that investment can fix everything. It can’t change the attitude some men have towards women or immediately close the salary gap, for example. But it can do a lot of good.
The UK might not be on the verge of becoming Texas, but it should not rest on its laurels.
Instead, it should do everything it can to ensure that women of all ages and education levels around the world are empowered and given as many opportunities as possible. It’s hard to think of a better way to do so than by investing in them.
