The two national promotional institutions have signed up to a new programme funded by the European Investment Fund aimed at boosting female participation in venture capital and private equity.
The German Federal Ministry for Economic Affairs and Climate Action (BMWK) and Dutch state-owned investment fund Invest-NL have become the first two parties to join the pan-European Gender Smart Equity Investment Programme.
This scheme, which is aimed at boosting gender diversity in venture capital and private equity firms, was launched by the European Investment Fund (EIF) after it found in a recent study that only 14% of the top jobs in venture capital firms in Europe were held by women, while they account for 35% of lower-ranked positions.
According to the study, boosting interaction between mixed-gender investor teams and female business leaders can be an effective way to narrow the gender gap.
“This is about creating an ecosystem where female leaders thrive,” said Jellie Banga, board member of Invest-NL. “It is a commitment to future generations that equality and inclusivity are not just ideals, but the standards we strive for, which will foster innovation.”
Better financial results
The scheme will operate as a virtual platform, with individual mandates being developed with national promotional institutions in EU countries. These mandates aim to boost gender diversity in venture capital and private equity firms by providing capital to female-led fund managers.
The programme requires firms to have at least one of the following: a management team with at least 30% female representation, a senior investment team with at least 40%, or an investment committee with at least 40% women.
“Research clearly shows that gender diversity delivers better financial results,” said EIB group president and chair of the EIF board of directors Nadia Calviño. Women “are clearly underrepresented in EU private equity, venture capital and private debt markets”, Calviño said, before adding that the new scheme is “a novel instrument to foster a more inclusive and innovative business environment”.
Gender-lens investing
Greater gender diversity in the workforce could lead to a potential increase of 26% in annual global GDP and enhance business performance by 15%, according to a 2020 report by the European Investment Bank.
Anna Christmann, commissioner for digital economy and start-ups at BMWK, said it was “high time to close the gender gap in VC funds”. The more European countries join the scheme, “the more we can enhance and strengthen the start-up landscape across Europe in the foreseeable future”.
As reported by Impact Investor earlier this month, gender-lens investing has grown in recent years, with two new global, multi-billion dollar initiatives being launched recently.
