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UBS Bets Client Money on Women-Led Companies

March 10, 2017

The American wealth management unit of UBS Group has pitched in for a $110 million investment in a venture capital fund betting on companies led by women, Bloomberg writes.

The fund will focus on firms either led or at least co-managed by women in education, health and environmental areas, the news service writes. More than half of the amount raised came from UBS clients, while Rethink Impact, the venture firm that manages the fund, came up with the rest, according to Bloomberg. Several high net worth clients at UBS, with women representing a “disproportionate” part, put up about 40% of the money for the fund, John Amore, managing director and head of wealth management advice at UBS in New York, tells the news service. The rest came from institutions, he says. But UBS declined to disclose its fees to Bloomberg.

The fund is a way to reach potential clients, according to the news service. Connecting with women “was one of our goals,” Amore tells Bloomberg, adding that women are creating wealth just as fast or even faster than men. Rethink founder Jenny Abramson, meanwhile, tells the news service that women are expected to control two-thirds of U.S. wealth by 2030.

But it was UBS clients’ growing interest in impact investing that led to the creation of the fund, Amore tells the news service. UBS raised $471 million last year for a fund where part of the profits are slated for healthcare research in emerging markets, Bloomberg writes.

(Getty)

Abramson, meanwhile, says investing in women-led firms is a “market opportunity,” citing a First Round Capital report that found that such firms do 63% better than companies founded by men, the news service writes. Nonetheless, only 3% of venture capital goes toward women-led firms, Bloomberg cites Abramson as saying.

That could be in part because in recent years only about 7% of founders at firms seeking venture capital were women, according to Bloomberg data put together last year. And that’s despite the fact that several venture capital funds focus on women-founded firms, according to the news service.

By Alex Padalka
  • To read the Bloomberg article cited in this story, click here.