The Importance Of Driving Female Inclusion In Fund Management In Africa

There is a compelling correlation between gender balance and fund performance: companies with diverse management teams are more profitable and create greater value. This is the conclusion of the International Finance Corporation IFC report titled Moving towards gender balance in private equity and venture capital.

The report also indicates that gender- balanced portfolio companies experienced a 64 increase in company valuation between two rounds of funding or liquidity events. However, only 12 of senior general partners in sub-Saharan African private equity PE and venture capital VC firms are women.

A separate study by Beiyun Xiao, Pia Helbing, and Theodor Cojoianu at the University of Edinburgh, Andreas Hoepner from the University College Dublin, and Xi Hu from Harvard Law School showed that PE firms which are at least 50 owned by women are 6.8 more likely to pursue impact investments.

These findings, among others, indicate that despite the strides that have been made in diversifying business and spreading investment, a tangible gap still exists.

While this can be interpreted as a negative point, it presents an opportunity. Financial institutions such as PE, Private Debt and VC are good sources of capital into the business sector but, as the research demonstrates, women have little control of this pool of capital and assets.