Women Are More Likely to Back Impact Investments Than Men — Here’s Why

Private equity firms in which women own at least 50 percent are 6.8 percent more likely to pursue impact investments, research shows.

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Private equity firms with female owners are more likely than their male-owned peers to focus on impact strategies.

According to a new research paper, private equity firms in which women own at least 50 percent are 6.8 percent more likely to pursue impact investments. Impact funds back private companies with both social objectives, such as affordable housing, and profitability goals.

The study, which analyzed 278,000 private equity deals between January 2010 and December 2021, was researched by Beiyun Xiao, Pia Helbing, and Theodor Cojoianu from the University of Edinburgh, Andreas Hoepner from the University College Dublin, and Xi Hu from Harvard Law School.

In an interview, Xiao, one of the authors, said the relatively higher interest from women, compared to men, in both impact and environmental, social, and governance strategies is — at least in part — attributable to the different social environments in which many men and women are still raised. “There’s lots of research in adjacent social science fields regarding [women’s] social identities and tendencies,” Xiao said.

Fionna Ross, sustainability investment specialist at asset manager abrdn, agrees with Xiao. “Various pieces of research suggest that women are more likely to invest according to their values, and so careers in ESG investing are a natural step given that interest,” she told II.

Ross added when ESG strategies first emerged, questions from investors were often directed to divisions overseeing corporate social responsibility or investor relations. “The assumption was that [the questions] would relate to topics including employee volunteering or charitable donations,” Ross said.


“That image, as incorrect as it is, doesn’t stand up to the average ‘stereotypical’ male profile and so may be one reason why women initially tended to dominate the ESG field.”

Helbing, another author of the study, said women’s high representation and interest in ESG may also be pragmatic. The private equity industry is one of the least diverse sectors of the investments industry and women still face higher barriers to entry. As a result, women-owned PE firms are generally younger and smaller. Focusing on impact investments is a way for newer market entrants to find an edge and leverage the growing interest in impact investing. “[ESG] is a way to break into the industry of private equity,” Helbing said. Women-owned PE firms are 13 years old, on average, and have 25 employees. That compares to male-owned firms that have been around for 27 years, on average, with 82 employees, according to the paper.

Abrdn’s Ross thinks more men will enter impact investing over time. “Increasingly, as ESG is being further embraced and its actual relevance to investing better understood, it is being viewed less as a ‘steppingstone’ role into the investment industry, and more of a career opportunity on its own merit,” she said. “As ESG investing has risen in importance, so too have the opportunities around it in terms of open roles. And with that there has also seems to have been an increase in the number of males in ESG-related positions.”