Gender-Smart Investing Journeys: Ingrid Leong

We spoke to Ingrid Leong, CIO at the Houssian Foundation, asking her to look back on her experience aligning the Foundation’s investment strategy with gender lens investing and creating a fully mission-aligned investment portfolio.

Developing a gender-lens investment strategy can take many forms. What have you learned along the way? 

We started by just asking the question: what is a gender lens investment for us? There are so many different ways to answer that question and we wanted each gender lens investment to be meaningful and impactful, not a box ticking exercise. We did a lot of upfront work to educate ourselves about the gender-lens investment landscape and quickly realised it’s much broader than we initially understood it to be. Project SAGE 3.0 was a natural starting point for us to really start to understand this landscape.

 A key learning for me was about approach. Early on, I would find an opportunity and I would do everything I could in terms of assessing the risks and opportunities. I’d work through all the due diligence and then present it to the Investment Committee. I quickly learnt there was a lot of value in bringing the committee along through the process, both in terms of our collective learning but also as a means to drive open and transparent discussions. We’ve started to bring the fund managers in to meet directly with the Investment Committee - each investment is then an opportunity to allocate capital but also to educate ourselves about being more impactful gender lens investors. Our collective learning is ongoing.

Are there any investments that stand out as reflecting the Foundation’s values and the work you're trying to do?

One investment that really shows our evolution as gender lens investors over the past 18 months is Rhia Ventures. It’s a fund focused on investing in reproductive and maternal health solutions. A fundamental part of their thesis is looking to increase access to reproductive health for all women, recognising that BIPOC women are disproportionately impacted by a lack of reproductive health care access. It’s very clear that we can’t achieve gender equality when the mortality rate for a Black woman giving birth is three times that of a Caucasian woman.  Our learnings as an Investment Committee over the past year helped us see Rhia for the unique and innovative opportunity that it is.  

“We’ve started to bring the fund managers in to meet directly with the Investment Committee - each investment is then an opportunity to allocate capital but also to educate ourselves”

There’s a perception that some gender lens investments are just riskier. Have you encountered this bias in your work?

Absolutely! There's definitely a perception that gender lens investing is somehow “narrow” and therefore riskier or that there is an inability to measure risk. There’s also a tendency in the gender lens community to be seeking the holy grail of data; we need the track record, we need the story. It’s uncomfortable, but sometimes there isn't a track record for many reasons. We, as an institutional investor, need to step beyond that and take calculated risks. This is part of the structural change being a gender lens investor brings to the table.  In areas where that data does exist, it should be brought forward, but a lack of historical data should not automatically translate into additional risk and a reason to say no.  We often fail to recognise that a portfolio  being run entirely by one type of person with a certain way of thinking  is in itself is an investment risk.

That’s so true - and, given that, have you been working with any first-time women fund managers?

We work with a lot of first-time fund managers. Actually, first-time funds, either male or female-run, tend to outperform those same fund managers’ second or third funds. Obviously we look at track record, but for all three of our gender-lens investments in this year, there was no quantifiable track record from a fully exited previous fund to reference. We were able to look beyond that, to the fund manager’s investment thesis and to the market itself. We've had a lot of challenging conversations as an Investment Committee, but that wasn't one of them. Frankly, you meet some of these women and any concerns that you have about it being a first-time fund are completely tossed out the door because they're able to so clearly able to articulate their investment thesis. It’s often a lot more compelling and interesting than, say, a fund-five which has been doing the same thing for the last 30 years. 

“We work with a lot of first-time fund managers. Actually, first-time funds, either male or female-run, tend to outperform those same fund managers’ second or third funds”

One last question: What advice would you give to someone who is just starting out as a gender lens investor?

One of the most important elements of becoming a gender lens investor is education. You can have a team that is very well versed on technical investing, but there's so much more to learn. I would recommend allocating resources to the educational piece - and I don’t mean [just] taking a course.  Our learning required an investment of time to develop key relationships and an understanding of the field to allow us to really integrate gender into our due diligence. It doesn't need to cost more in terms of management fees or sacrificing return, but it takes more time to be an impact investor. 

Governance is also really important.  That sounds formal, but to be successful in deploying capital there needs to be a framework and a process. You can’t approach it with too much ambiguity. You need to answer the questions: Who are the decision makers? What is a deal breaker? What isn't? What are we willing to explore? What's the timeline? Without that, you can end up spinning in place. 

My last piece of advice is how important it is to have people in your network that you can call when there’s something you’re not sure how to navigate. The gender lens community has been incredibly generous to us. And it is people like Suzanne Biegel, and other institutional investors who have been through this process that have really helped us make some of our bigger decisions.

What we’ve done over the last year and a half has been one of the most rewarding pieces of my work. I’m so inspired by The Houssian Foundation’s commitment to this investment strategy. It’s progressive and it’s ripe with the possibility for impact – and yet there’s still so much work and learning to be done.