Conference Presentation, Panel
The $700 Billion Opportunity: Women Investors Unlocking the Female Dollar | Global Conference 2024
Milken InstituteAnna Mason, Tonya Allen, Erin Harkless Moore, Kwanza Jones, Sallie Krawcheck, Linnea Roberts
- Market opportunities regarding women's assets under management are projected at approximately $2.5 trillion, exceeding the previously cited $700 billion, while a "feminization of wealth" is anticipated to result from a massive wealth transfer of roughly $80 trillion (with some estimates between $20 and $30 trillion) moving from Baby Boomers to heirs.
- Women are expected to receive the bulk of this transferred wealth first due to a six-to-eight-year longer life expectancy than men and high divorce rates, leading to trends where they become more confident investors, prioritize impact, and increase donations to non-profits and political candidates.
- Future wealth accumulation is further supported by the demographic of young women who constitute the majority of college and graduate school graduates and are projected to earn higher incomes, creating a net positive wealth trend.
- Emerging managers (funds aged one to three) are forecasted to consistently outperform later-stage funds on a vintage-year-over-vintage-year basis with higher median IRRs, comprising over 1,000 venture capital funds managing less than $300 million since 2018 that represent a significant pool of talent for institutional LPs.
- Institutional investors are expected to rely on emerging managers as a core component for top-tier returns, though they face the risk of missing alpha generation if they fail to "interrogate" bias associated with the "emerging manager" label or lack incentives to back newer firms led by women.
- The firm Construct Capital, led by Dana Grayson and Rachel Holt, is expected to continue building a sustainable platform with early traction in manufacturing, logistics, and transportation over the coming decades.
- The average exit time for early-stage venture capital companies is projected to extend to 10 years or more, marking a shift from the historical benchmark of eight years.
- Diversity in leadership is trending upward, with the percentage of venture capital allocated to male-female co-led companies rising from 17 percent to a recent high of 21 percent.
- The McKnight Foundation expects that signaling a move to a net zero endowment will prompt other multi-billion dollar foundations to follow suit within a couple of years, while early investment in underrepresented managers is anticipated to access undervalued talent and generate alpha.
- Women are expected to begin investing earlier by allocating a small percentage (2%, 5%, or 10%) of their first paycheck to harness compounding, provided they stop waiting to feel "perfect" or fully informed and receive engaging, less pedantic education to reduce risk aversion.
- Societal and cultural barriers are expected to persist, including a "glass door" in fundraising operated by a scarcity mentality unless actively dismantled by allies, and the collective power of women may struggle to realize gains for the next 50 years if momentum is not actively maintained.
- Institutional investors are expected to need to diversify portfolios by gender to reach a representation where women manage 51% of money, aligning with population demographics and sourcing superior performance.
- Women and founders are expected to continue struggling with imposter syndrome until they adopt and believe in a specific "supercharged statement" regarding their capabilities, while the industry expects to eventually reach a point where an all-female panel of top investors is no longer considered novel.