SRI fund sets sights on women-friendly firmsDecember 2009
A new avenue has opened up in the socially responsible investment field with the creation of a fund investing in companies with a high number of women in senior roles.
The Women’s Leadership Fund, started this month by Switzerland-based Naissance Capital, aims to invest up to $2billion (£1.2bn, €1.3bn) in such companies, as well as taking an activist role in persuading other businesses to increase the proportion of women in top jobs or on the board.
‘We believe we can earn higher returns and fulfil an important social objective by investing in companies demonstrating best practices on gender diversity,’ said Daniel Tudor, the project manager. ‘We will act as a beacon by investing in firms which understand the need for greater female representation, and taking an activist stance against those that do not.’
Companies in which the fund is likely to invest are two US chemical groups, DuPont and Dow Chemical, and the Swedish retail group H&M. The French retailer Carrefour, however, is expected to be a target of its activist approach, given that 80 per cent of Carrefour customers are women but only 11 per cent of its directors are female.
Naissance claims studies have consistently shown that companies with a high number of female directors and managers outperform the market – and that greater gender diversity can reduce ‘the male tendency towards excessive risk-taking’ in the boardroom.
A 2007 McKinsey study that examined 89 leading European companies found return on investment and stock price growth were higher in those employing above-average numbers of female directors and managers, while Catalyst found the top quarter of Fortune 500 companies with ‘positive gender diversity’ outperformed those in the bottom quarter with a 53 per cent higher return on equity.
The fund, which has been formed as an open-ended investment company and will be domiciled in the Cayman Islands, will be overseen by a board featuring prominent women, including Cherie Blair, wife of the former UK prime minister Tony Blair, and Kim Campbell and Jenny Shipley, the former prime ministers of Canada and New Zealand respectively.
It will invest in publicly listed companies worldwide and aims to outperform the MSCI index by three per cent a year.
Twenty per cent of the fund’s management fees will go on ‘promoting opportunities for outstanding women lacking financial means or coming from deprived backgrounds’.
Naissance, which was established ten years ago with money from wealthy Swiss families, is not especially associated with SRI, although one of the three other funds it manages concentrates on healthcare.
Focussing a fund on such a specific SRI area is unusual, although last summer Paris-based AXA Investment created a fund solely to invest in European companies with best-in-class employment and working practices – on the similar premise that such firms perform better.
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