Capria is advancing the next generation of local fund managers that invest in hundreds of small and growing businesses (“SGBs”) in emerging and frontier markets in Africa, Latin America, and Asia. We provide these capable, highly-vetted, local fund managers with a unique platform for success, including senior-level partnering and capacity building, a global peer network, and tailored, patient capital. Our growing network of fund managers are targeting to deliver both commercial returns and impact at scale.
Most of their investments have a disproportionately positive impact on women and their families, and many of our fund management teams have women leadership. Moreover, the flexible structure of our Capria Fund LLC (“the Fund”) allows gender lens investors to “double-down” on their investments by tailoring their allocation to be gender smart.
Global Gender Smart Opportunity
Investing in women, for women, and by women is finally starting to garner the attention it deserves on an unprecedented global scale. According to IFC, women-led small and medium enterprises (SMEs) worldwide face a $1.4 trillion shortfall in access to credit. According to a McKinsey study, closing the gender labor gap could add up to $28 trillion, or 26%, to annual global GDP in 2025. There are many reasons why that’s important including the fact that when women earn a competitive income, they spend 90% of it on their households, food, healthcare, and education.
So who’s going to put capital to work to unlock this opportunity? It’s a well known fact that women are underrepresented in the financial services industry. Yet, what is often overlooked is that there is a strong correlation between gender balanced leadership and financial performance as found in a recent study by IFC. Funds with gender-balanced leadership outperformed their unbalanced peers by as much as 20% in annual returns.
Fund management teams with female investment partners have approximately 70% more female-led businesses in their portfolios than teams with all-male partners. Furthermore, portfolio companies with gender balanced leadership teams have outperformed unbalanced peers in median valuation increases by as much as 25%.
In short, it appears that investing in women pays dividends with respect to both a social impact and financial returns.
Disproportionate Impact on Women
Throughout the world, local fund managers stand at the nexus of identifying, funding and supporting the most promising entrepreneurs and companies. In our evaluation of nearly 700 fund managers, aiming to raise funds between $20M to $150M, we see an excellent opportunity to generate hundreds of millions in revenue in local economies, employ tens of thousands of people, and the potential to impact millions of lives. We expect our network of fund managers to have impact across three primary dimensions:
- Market development – The fund managers in the Capria Network foster innovation among SGBs that deliver sustainable products and services in underdeveloped and developing economies through their investments.
- Catalytic early stage capital – The fund managers in the Capria Network provide access to early-stage and early-growth capital to entrepreneurs in forms best suited to their needs. Across different countries, the gaps in early stage capital vary, creating specific market opportunities to make investments.
- End clients/systems – The fund managers in the Capria Network invest in businesses that sustainably address specific needs of local low- to middle-income communities with solutions that matter and make a difference to their lives.
We are targeting to directly improve over 8 million lives by 2028 across various UN SDGs based on the opportunities fund managers in the Capria Network identify. Notably, most of the 19 funds selected to date to join the Capria Network are already investing in companies that disproportionately have a positive impact on women and their families. Here are just a few examples:
- Radiation-free portable breast cancer screening device with the potential to save the lives of millions of women in India and beyond.
- Providing high-quality, day-old chicks for consumer poultry farming that supports thousands of women farmers in Zimbabwe.
- Home-based call center service improving livelihoods for lower-middle-income women, allowing more time to educate their children and pursue their own education, in Brazil.
- Micro-franchising of K-8 after-school math learning that provides in-home employment for women and improved math education for lower-middle-income girls and boys in India.
Women Leadership in Capria Network
In addition to supporting SGBs that impact women in emerging markets, Capria offers gender lens investors an opportunity to fund and empower financial firms with female leadership. Of Capria’s 19 fund managers, 6 fund managers currently have women partners or principals. We explicitly seek out diverse leadership through our evaluation and selection process. Comparatively, the global industry average is 10% based on IFC’s recent study.
These fund managers include:
- Terra Global Capital is a women-led firm in Colombia, raising a $40M fund to invest in small farmers and in transforming farmland from producing coca to producing chocolate.
- Alitheia IDF is a women-led firm based in West and Southern Africa, raising a $75M fund focused on investing in gender-inclusive, high-growth SGBs.
- Capital Invent is a Mexico-based firm with a woman partner, raising a $60M fund to invest in early stage ventures in fintech, edtech, SaaS, and e-commerce sectors in Mexico.
- Lateral Capital is a firm with a woman principal in Nigeria and a female venture partner, raising a $50M fund focused on mid-stage growth companies across multiple impact sectors in Sub Saharan Africa.
- Unitus Ventures is a firm with a woman principal, raising its second fund of $45M, as the leading early-stage impact investor innovating for the masses in India.
- Brightmore Capital is a firm with a woman principal in Senegal, raising a $30M fund targeting high-potential SGBs across multiple sectors in Francophone West Africa.
Institutionalizing Gender Smart Investing across Capria Network
As Capria brings new fund managers into the Capria Network, we are committed to continuing to increase the integration and propagation of gender smart investing principles into our capacity development within the Capria organization and for our network fund managers. These efforts include:
- Integrating gender smart strategies into Capria’s investment decision process, including the addition of diversity, equity and inclusion (DEI) criteria to Capria Quantum, our proprietary evaluation tool to evaluate the selection and progress of fund managers.
- Supporting our fund managers to foster gender inclusive policies in their organizations and help them to create gender smart portfolios, including the dissemination of tools, templates and guides to better integrate gender smart investing.
- Inviting experts to share gender smart investing experience and learnings in virtual and in-person workshops on gender smart investing.
- Creating a gender smart investing leadership circle for Capria Network members with the focus to collaborate and share best practices.
- Actively learning from and contributing to industry working groups and discussions, such as the Global Impact Investing Network (Gender Lens Investing Working Group focused on tools, research and strategies); and Emerging Market Private Equity Association (Gender Parity Acceleration Working Group focused on research, tools for practitioners and advocacy).
A Call to Action
As we have been evaluating and determining our own framework for further incorporation of gender smart investing, we reviewed best practices from a wide range of thought leaders including the 2xchallenge, IADB, IFC, GIIN, EMPEA, among others. We encourage all investors to do the same and then take action. Establishing frameworks, policies, and processes and institutionalizing them within your firm culture leads to better results for all.