This week, Andrew Cohen explores the concept of gender lens investing, a strategy increasingly adopted by families focused on making a positive impact. This approach aims to empower women and promote sustainability by elevating women to leadership positions and board roles, among other aspects.
The W.K. Kellogg Foundation Trust stands to earn about $4.3 billion from a transaction with Mars, the company behind products like M&M's and Snickers, as reported by our sister publication Pensions & Investments. The Battle Creek, Michigan-based Kellogg Foundation Trust is the largest shareholder in Kellanova, which Mars plans to acquire in a $36 billion deal. Continue reading to learn more about this pending deal.
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HANDPICKED: Gender lens investing empowering women, driving sustainable growth
By ANDREW COHEN
Gender lens investing has continued to be a powerful strategy for impact-driven family offices, combining the goals of empowering women and advancing sustainability.
According to the Criterion Institute, a social-justice-oriented think tank, gender lens investing involves "incorporating a gender analysis into financial analysis to achieve better outcomes."
And while ESG (environmental, social and governance) — an investing principle similar in concept to gender lens — has been a political flashpoint, particularly over the past year, gender lens investing continues to grow in the shadows of the broader and more controversial ESG scope.
Financial Planning reported in June that gender lens investing funds saw 9.5% quarterly growth in assets under management, and that publicly-traded gender lens investing funds had $4.6 billion in AUM as of March 31.
Supporting this approach, a 2021 study of 5 million Fidelity Investments customers found that women, on average, outperformed men by 0.4% in investment returns. Research further highlights that women tend to live longer, invest more conservatively and are more inclined to support companies with positive environmental impacts.
“Family offices can say we’re going to use 50% women as asset managers, and they can make an incredible difference because we do look at the economy differently. It’s a significant way to diversify a portfolio,” said Kristin Hull, founder and CEO of Nia Impact Capital. “We think about how diversity is good for investing, and yet we haven’t taken into account who’s the investment manager. That’s one way family offices can really be game changers.”
Gender lens investing can be particularly effective with issues like climate change. “We’re very climate-focused, and we see gender as a way to get to a better climate,” Hull said. “There’s some research and stereotypes about women being long-term thinkers, and climate is a long-term issue.
“We can’t solve that in a quarter. So if men are making short-term decisions, and women are making longer-term, it’s nice to have that combination working together.”
‘Things are just better’
Another aspect to gender lens investing is helping elevate women in leadership roles and board positions.
“We won’t invest in a company that doesn’t have at least two women on the board in our core strategies,” said Blaine Townsend, director of the Sustainable, Responsible and Impact Investing group at the Bay Area-based wealth management firm Bailard. “But it’s important to note we’re not looking for all-women boards, either. We want board diversity.”
Said Hull: “When we’re looking at products and services designed by companies, when women are involved in those decisions, the products are better because they’re including that 50% of the population. That’s true for clinical trials for medical testing, automobile development and city planning. It really does span quite large aspects of our economy. When using a gender lens, things are just better.”
Women entrepreneurs generally are able to secure early-stage investors, with one recent example being an $11.2 million round of Series A funding for Female Invest to grow its personal finance app for female investors. Yet the wealth advisory firm Align Impact emphasizes its gender lens approach to extend past early-stage funding.
“If you look at it through the lens of asset class, there are way more venture firms and companies raising early-stage activity that are led by women than there are real asset firms, private debt strategies or private equity strategies,” said Ali Motroni, client experience director at Align Impact. “There are some sectors I think are really ripe to invest specifically in women founders — areas where women have primarily played an outsized role, like in caring for aging populations, in child care.”
Challenges in tech
“Finance and tech are traditionally very male-dominated,” said Nisa Amoils, managing partner at A100x Ventures, who invests in early-stage blockchain and AI companies. “I think a lot of women are afraid to go into it and maybe haven’t been treated so well so they get out of it.
“It’s impossible to do a gender lens fund, I think, in AI and blockchain. You just wouldn’t have any deal flow really, not enough.
“I’ve never subscribed to cutting out half your deal flow as a venture investor.”
Amoils, who wrote the 2019 book WTF Is Happening: Women Tech Founders on the Rise, sees how diminished funding opportunities affect women as entrepreneurs and investors.
“I just think [women are] more prudent on the spending and the runway from what I’ve seen [after] investing in women and men,” she said. “The capital they raised lasts longer because they know it has to, they’re not going to get a second chance like a man. So they’re very prudent in their decisions, and it usually works out well.”
Representation by women in the tech industry has been especially challenging, with two industry groups, Girls in Tech and Women Who Code, both closing down this year after each had been active for over a decade. The media conglomerate Cox Enterprises, which operates the Cox Family Office, continues to sponsor an educational program for Girls Who Code. In addition, Sixth Street, a private equity firm with $75 billion in assets under management, similarly sponsors the Girls Who Invest nonprofit, which aims for women to manage 30% of the world’s investable capital by 2030.
The ESG, DEI issue
The pursuit of gender lens investing comes as fund managers and U.S. policymakers have grown increasingly critical of ESG. The debate around its merits has spilled beyond politics and onto the screen, where ESG is a plot in the new season of HBO’s "Industry" series, debuting in August.
Some backlash against DEI (diversity, equity, and inclusion) has also heightened following last year’s U.S. Supreme Court decision to end race-based affirmative action in college admissions. Corporations such as Microsoft, Zoom, Meta and Alphabet Inc.’s Google have recently made significant cuts to their DEI programs, but real trailblazers won’t only look to appease government regulations.
“We probably are entering a period where the backdrop for how these issues are treated from a regulatory standpoint is very much in flux,” Townsend said. “We look for companies’ own internal engine for how they handle these things, companies that lead on these issues and aren’t just driven by what government regulations demand of them.
“Companies that are transparent on their policies and programs on gender issues, we would value highly.”
Kellogg Foundation Trust to make $4.3 billion off major snack company deal
Pringles, manufactured by Kellanova, will soon join the Mars Inc. family.
By BRIAN CROCE | PENSIONS & INVESTMENTS
The $7.6 billion W.K. Kellogg Foundation Trust stands to make about $4.3 billion from a deal announced Wednesday between two of the leading snack producers.
Mars, the maker of products like M&M'S, Snickers and Skittles, will acquire Kellanova, the maker of products such as Pringles, Cheez-It and Pop-Tarts, in a $36 billion deal that’s expected to close within the first half of 2025, according to a news release.
The Battle Creek, Michigan-based Kellogg Foundation Trust is the largest shareholder in Kellanova, owning 51.2 million shares or 15%, according to a June 30 Securities and Exchange Commission filing. The announced share price for the Kellanova acquisition was $83.50.
The foundation did not immediately respond to a request for comment, but it has entered into an agreement to vote its shares in favor of the transaction, according to the news release.
The foundation’s asset allocation as of Aug. 31, 2023, was 50% equity, 22% hedge funds, 17% private equity, 7% commingled funds, 3% real estate and the rest fixed income, according to its most recent IRS filing.
LOOSE CHANGE
Watch from McQueen’s 'Le Mans' enters auction: Sotheby’s will host the auction debut of a TAG Heuer Monaco watch worn by Steve McQueen during filming of his 1971 auto racing drama "Le Mans." It will be auctioned Dec. 11 and is expected to fetch up to $1 million.
World Investment Advisors hires finance leader: Kevin Ryan has been named CFO of WIA, a financial advisory firm with over $55 billion in assets across its institutional and wealth management segments.
Firm backed by Bezos’ brother raises $100 million venture fund: HIPstr, the venture arm of Mark Bezos and David Moross’ HighPost Capital, raised the funds from rich individuals and institutional firms for early-stage deals outside its traditional buyout focus.
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