This report highlights the significant barriers women fund managers face, with too little funding reaching local, diverse women fund managers. The report highlights the impact of unconscious bias, stereotypes, and a lack of support networks as key issues. The report calls for “fixing the system” rather than attempting to “fixing the woman.” Drawing from interviews with over 100 experts, investors, and enterprise intermediaries, the report recommends investors experiment and test new fund management methods that break with convention and are tailored to the unique needs of the female population.

The report outlines the primary ESG issues as a lack of diversity and the resultant inefficiency in capital allocation due to unconscious bias and stereotypes. It shows that investing in women decision-makers in emerging markets has a significant potential for impact – profit as well as social. Diverse teams show 10.6% higher investment returns and 10.9% higher dividend payouts in emerging markets. Additionally, gender lens investing indicates the potential to uncover untapped market opportunities and generate revenue growth. Finally, the report highlights the importance of agile organisations to drive innovation and how organisations with strong gender balance perform better than those without.

The report recommends a change of practices, including LPs establishing facilities for funding first-time women fund managers. The report also recommends that DFIs set public targets to fund first-time women fund managers and challenge other investors to do the same. Investors can also modify the selection criteria, weight the industry experience combined with personal or private market investing, and formalize gender-related questions into routine procedures. GPs can also reach beyond their usual networks to proactively communicate job opportunities to groups supporting women in finance, use debias hiring practices, hold interviews following a uniform format and set goals around diversity in hiring.