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Numbers don’t lie: Investing in women-led firm

Sometimes numbers tell as good a story as words do.

Michele Lippincott, first vice president of wealth management at UBS in Baltimore, can rattle off a few of those revealing digits.

“Only 50 percent of the world’s women are gainfully employed, compared to 75 percent of men,” she said.

Eighty percent of part-time workers worldwide are women, she noted.

“If we were able to get more women in the workforce, we would add $12 trillion to the economy in a decade,” Lippincott said.

Eighteen percent of World Index companies have female directors, Lippincott continued. But – and here’s where the numbers get really interesting – companies with 30 percent or more female leaders have higher profits on average than firms with no female leaders. The source for Lippincott’s stats is a white paper that UBS published late last year as it dove into the issue of women and wealth and encouraged a new mindset, that of seeing women as agents of worldwide economic change.

One way UBS had opted to affect this change itself is by investing $100 million in Rethink Impact, a venture capital fund that invests in female-led tech companies that address some of the world’s biggest challenges.

“There’s so much data that shows that women create more business than men,” Rethink Impact founder Jenny Abramson said.

The firm is the largest U.S.-based, impact-focused firm “with a gender lens,” Abramson said. It invests in companies like Change.Org, a popular online petition platform, and Classy, an online and mobile fundraising platform that was started in 2011 and has been used by more than 3,000 nonprofits.

Another company, Neurotrack, focuses on brain health and cognition. One service it offers is a five-minute, in-home assessment to help consumers detect declining brain health.

Startups like these often easily secure an initial investment, but then hit a “valley of death” when they attempt to bring in more capital and scale up, Abramson said. Rethink Impact hopes to counter that by partnering with UBS and bringing investors from all 50 states and all demographics.

Men and women as well as millennials to boomers are investing in the fund, she said.

 

Looking ahead

Will this fizzle out by the end of 2017 or is this a trend that likely will continue? Here come some more numbers: by 2030, two-thirds of U.S wealth will be controlled by women, Abramson said.

It’s one of the factors that got her excited about starting Rethink Impact two years ago. Women and millennials have both begun to inherit and control more capital and both groups have leaned toward investing, at least somewhat, in companies with solid social missions.

In other words, “you don’t have to compromise your financial returns to do good for the world,” Abramson said.

Beth Rosenwald, branch director and financial advisor at RBC Wealth Management in Baltimore, agreed that women are taking a stronger role in the “empowerment of money.” Twenty years ago, it was “almost not polite” for women to talk about the family finances.

“Today, it’s all in,” she said.

As more women get involved, there have been more changes to the industry, and Rosenwald also said that her female clients show more of a philanthropic interest in their investments.

“They are asking, ‘What can I do with my money that will make a difference for the greater good?’” she said.

And yes, Rosenwald, who was recently named one of Forbes Magazine America’s Top Women Advisors, does expect the wealth management business to grow in this direction, adding that the industry is not stagnant but a “living and breathing thing.”

 

 

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