Whether an investor is motivated by impact or by financial returns, or both, these asset classes are a core component of many private as well as public finance portfolios. However, there is a missing “XX factor” in much of that investing. And that factor is gender and diversity. Not only are fund managers missing out, but the entrepreneurs that they then fail to fund, the innovative solutions that are overlooked, the increased risk in portfolios due to lack of diversity, resulting in blind spots, simply do not make sense in the 21st century. If we are not tapping into the skills and knowledge of half of the population, investors and the world are missing out.

Fiduciary duty is often cited as the reason why investors and investment advisors limit the universe of investable propositions to structures and managers that are familiar and considered established. And yet we know that a significant portion of the market – investment in women setting up funds for the first-time – is currently being overlooked. Many of the most innovative funds are from emerging managers.

Gender lens investing (GLI) can be a key driver of economic growth and sustainable development. It can advance diverse fund managers, companies and value chains with gender balance, products and services that improve the lives of women and improve business, and environmental and social outcomes for all. Further, because women are twice as likely to invest in other women, GLI funds have the potential to create a unique ecosystem of financing and opportunity that channels capital to under-developed parts of the market where lack of access to finance for women or businesses that positively impact women’s lives is entrenched by systemic bias.