What is gender-smart investing?

Gender-smart investing is growing across the investment space, spanning private equity, venture capital, and debt. Billions of dollars are held in assets under management, in both private and public capital markets, and the opportunities to mobilize capital and invest to close gender gaps are promising and growing.

Evidence shows that gender-smart investment strategies can help grow a company’s competitiveness, solidify its supply base, improve its human capital, and help build an overall enabling business environment. By considering the full scope of the business case, companies can unlock opportunities for increased profit, growth, and innovation.

Gender-smart investing is defined as an investment strategy that seeks to intentionally and measurably use capital to address gender disparities and better inform investment decisions. Gender as a factor of analysis can highlight opportunities and reveal risks that can strengthen investment decision-making to achieve greater financial and social outcomes. Fund managers can assess and invest in companies across different gender-smart strategies, including:

Companies that are:

  • Owned by women and/or with women represented in leadership
  • Committed to a gender-diverse and equitable workforce
  • Committed to a gender-inclusive value chain
  • Committed to offering and designing products or services that consider the distinct needs of women as a consumer segment
  • Committed to ensuring their operations do no harm to women in the community

Fund managers can also apply gender-smart approaches to their own firms, by strengthening the gender diversity of their workforce and investment teams. Gender diverse teams are more likely to source gender-diverse companies and are better equipped to manage gender-diverse portfolios. Gender-smart strategies across the firm and investments decision-making therefore go hand-in-hand.

Fund manager’s guide to gender-smart investing

BII, in partnership with IFC and support from the Government of Canada, developed Private Equity and Value Creation: A Fund Manager’s Guide to Gender-smart Investing. The Guide is a practical step-by-step road map for fund managers on how to strengthen gender diversity within their own firms and incorporate a gender focus into investment operations. It combines learnings from BII and IFC’s experience with over 160 fund managers and draws on best practices with a series of case studies from stakeholders across the industry. The above definition is drawn from this guide.

2X Challenge

Central to BII’s approach to gender-smart investing is the 2X Challenge, an industry initiative to mobilise capital to advance women as entrepreneurs, business leaders, employees, and consumers of products and services that enhance their economic participation. This toolkit incorporates the 2X criteria and provides guidance on how to implement 2X across the investment process.

Gender Bonds

In February 2024 we published Gender Bonds: A Toolkit for the Design and Issuance of Gender Bonds in Africa, in partnership with FSD Africa, FSD Network Gender Collaborative Programme, and UN Women. This toolkit provides an overview of gender bonds in African markets, bringing together recent case studies and existing resources, and provides guidance on design for issuance.

Further resources and tools on gender-smart investing can be found on the Resources page.