WHY 

incorporating

 a diversity mindset into

investment decisions

leads to higher portfolio returns

Financial performance

At least no performance difference, evidence of higher business performance and higher fund returns.

Higher Investment Return

Lower competition offers lower bid-up deal prices, and significant open opportunities for investment.

The risk of not 

With diversity on the agenda for institutional and individual investors, questions are currently asked on the diversity of the investor team. The rapid introduction of the questions, has left many firms with a challenge to catch up.

 

The next step will be the diversity of investment portfolio, for performance gains, for the avoidance of group think in management, alongside diversification of portfolio risk and reputational risk.

Drivers of future growth

A diverse leadership team is a significant indicator for current, and future prospects, of financial business performance.

FINANCIAL PERFORMANCE

Diverse leadership teams, in study after study,

correlate with higher financial company performance.

FUND

FINANCIAL PERFORMANCE

1

Private equity portfolio received a financial boost from diverse led investments

Calvert Impact Capital

to maximise returns, 

seek out companies with 

gender diversity

Financial performance higher with +33% diverse board and senior management.

 

Portfolio study covered 11 years of data, for 160 companies, representing $23bn in assets.

 

Sales  +18% 
  RoE  8.6% v 4.4%  

2

Moving towards gender balance

in private equity & venture capital

IFC report 2019

After analyzing the gender composition of more than 8,000 firms, we found that gender balance has a significant impact on companies’ financial performance.

 

Private equity firms where women make up at least 30% of the team responsible for making investment decisions, achieved 10% - 20% higher rates of return than those in which women were not well represented.

"Funds with gender-balanced senior investment teams generated 10-20% higher returns compared with funds that have a majority of male or female leaders"

BUSINESS

FINANCIAL PERFORMANCE

1

 

Companies in the top-quartile for 

gender diversity on their executive

teams were 21% more likely to have

above-average  profitability than companies in the fourth quartile

’Delivering through Diversity, McKinsey 2018

Return on capital 35% higher

Global trends in gender diversity on corporate boards

MSCI 2015

Market capitalisation twice as high

Higher ‘Organisational Excellence'

EBIT 11.1% vs 5.8%

Lower risk of insolvency

Gender Balance & Insolvency Risk,

 2009     

‘Gender diversity, a corporate performance drive’

McKinsey 2007     

2

Innovation revenue 20% higher

Innovation through diversity .... how?

 
 

3

In the VC world, female led businesses show

returns of 20% more revenue

with 50% less money invested

Yet, male entrepreneurs 86% more likely to be funded

Untapped Unicorns, 

Barclays, 2017

4

 

For every $1 in funding,

female entrepreneurs generate $0.78 in revenue

compared to $0.31 by male entrepreneurs

BCG & MassChallenge, 2018

Causation or Correlation

The wealth of evidence offers up a causation or correlation debate,

or can prompt us to seek further granularity on sector and size,

yet the overriding rational remains.

Performance and returns provided by diverse and female led 

businesses are not reflected in current investment levels. Offering an untapped opportunity for investors.

FOCUSED ON DRIVERS OF

GROWTH, CUSTOMERS & TALENT

A customer-centric and collaborative approach to innovation 

 

A diverse leadership team focused on innovation through an outward-looking,

customer-centric and external-collaboration approach, has competitive advantage.

 

Competitive advantage to understand and engage the fast-evolving consumer demands, and acquire higher market share now and into the future. 

A driver to attract and retain top talent

 

Diverse leadership teams are seen to correlate with a businesses ability to

attract and retain top talent, a key driver for growth and competitive advantage. 

Is the X chronosome the X factor in leadership?

Find out why businesses led by women are outperforming the market,  EY 2018

 

REFLECT & UNDERSTAND

THE TALENT POOL THEY DRAW FROM

& THE CUSTOMERS THEY SERVE 

The future of work 

flexibility, purpose, collaboration, 

Diverse leadership teams see higher employee satisfaction and attract top talent

EY 2018

Ann Pickering, Chief of Staff,

 O2

Under 30s ask for flexibility, trust and work mobility, before salary.

60% of graduates are women

in the UK and globally

for the last 30 years

34% of millennials have left a job because it wasn't flexible

FlexJob 2017

CONSUMER AND BUSINESS CUSTOMERS ARE INCREASINGLY DIVERSE

 

Businesses that expect to keep up with their fast-changing customer demands, 

require leadership teams with the diversity to match the external environment.

65% of discretionary spend decisions

made by women

75% by 2028

McKinsey 2018

An under-estimation of the market that women represent,

has led to an under-investment in

businesses with products and services aimed at the female market.

 

Providing an investment opportunity for those who do invest.

Opportunities for the taking

for example

nVision

Offers an early detection for ovarian cancer.

Originally dismissed by investors as 'niche' and 'a women's issue'.

 

Exit value $275m

 
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