The opening presentation at Private Equity International’s third annual Women in Private Equity Forum in London last November came from the founder of a firm with a very unusual difference: it invests only in companies run by gender diverse management teams.
The speaker, Désirée van Boxtel, founded Dutch firm Karmijn Kapitaal in 2010 together with Hadewych Cels and Cilian Jansen Verplanke. The trio saw a gap in the market for a fund that invests in SME companies run by women, many of whom had not thought of private equity as a funding option.
“We found there was really an opportunity there of all sorts of deals that are just not being done because women do not find the right companies to turn to when they want to do growth financing or a buyout,” van Boxtel told delegates.
What’s more, the Karmijn Kapitaal team found that 25 percent of SME companies in the Netherlands, where the firm invests, suit its criterion of gender diversity (which officially means that at least 25 percent of the team is of either sex, van Boxtel said).
Karmijn Kapitaal closed its debut fund just under its €50 million target on €46 million after two and a half years on the road. It closed its second fund on €90 million last year after 10 months in market, with 70 percent of Fund I investors returning.
Gender diversity at the portfolio company level is something LPs are paying increasingly more attention to as part of their monitoring of progress on ESG issues by their managers.
“I believe in diversity in general, I think a diverse group of people are making better decisions, and an inclusive culture with a broad group of people allows for higher engagement,” says Mirja Lehmler-Brown, a senior investment manager at Aberdeen Asset Management.
“That’s why in our annual questionnaire we ask our GPs to report what percentage of the underlying workforce are women.”
Van Boxtel presented research to delegates at the Forum that gender-diverse portfolio companies deliver a return on equity of 10-35 percent higher than the industry average. Karmijn Kapitaal sealed its first exit last year, offloading YouMedical in a deal generating an internal rate of return of more than 60 percent.