Every investor wants their investments to perform financially. Impact investors also want them to perform socially – advancing solutions to important social issues. Impact Deetken has found a way to make both outcomes happen for Canadian investors looking to advance gender equality through private equity investments.
Son Ilu Women’s Empowerment Fund, launched in 2019, has made gender-based private equity investing in Latin America accessible to Canadian investors via its joint venture with Pro Mujer. And the results are impressive, with $45 million Cdn committed from 70 private investors, 40 percent of which are women.
‘Ilu’ means ‘to plant’ in the language of the Aymara people, Indigenous to the Andes and Altiplano regions of South America in Argentina, Bolivia, Chile and Peru. And sowing seeds of economic prosperity for women in those regions is Ilu’s focus. “Investing in businesses that serve women has proved resilient through economic upheavals, political shocks and natural disasters,” says Alexa Blain, Managing Partner at Deetken Impact, which manages the fund. “Our Ilu fund is designed to build on that track record with an explicit mandate to deliver great returns and advance gender equality in Latin America.”
How Ilu Moves the Needle on Gender Equality
Ilu invests in established Latin American businesses with a strong track record of sustainable operations. “We’re looking for businesses with a commitment to gender leadership,” Blain says. “This includes inclusive governance, women in leadership, workplace equity, gender in the value chain and community advocacy, and products and services that serve women. These companies don’t have to be perfect in all areas, but we’re looking for a willingness to advance gender practices.”
Last year, Ilu received funding through USAID that enabled it to actively engage with its portfolio companies, working closely with them to close gender gaps. “We accompany them on their journey to increasing impact,” Blain says. “For example, in Panama, one of our clients, a lender, only had 30% of their clients that were women-led, and wanted to increase that. So we helped them do a market survey to understand where they could tap into more women-led businesses and then to create gender-smart information systems to refine how they collect data about their clients. It’s important to have market insight not only regarding the needs and preferences of women clients, but also gender-related obstacles, opportunities, and patterns."
Through its programs, Ilu has served nearly half a million women, creating jobs, sustainable energy, healthcare services and financial literacy training, and aligning with five of the UN’s Sustainable Development Goals.
International and Accessible Impact Investing
Why focus only on Latin America? That’s where Deetken’s Co-founder and Managing Partner Jose Lamyin had the connections to create the kind of on-the-ground impact they wanted to deliver. “Jose is Peruvian,” Blain says. “He had already been investing in the region and had built a portfolio of like-minded investors from Vancouver. We teamed up to scale that strategy and create an asset management business.”
Today, Deetken has 25 staff and maintains an office in Vancouver, though 95% of its team members are based in the regions in which it invests: Costa Rica, Mexico, Guatemala, Honduras and Peru.
“We designed the fund to be something that would work for investors who were new to impact investing, emerging markets and private market products. ”
– Alexa Blain, Managing Partner, Deetken Impact
By creating an accessible entry point for impact investors, Ilu has been embraced among investors new to the impact space. “We designed the fund to be something that would work for investors who were new to impact investing, emerging markets and private market products,” Blain says.
Its most recent offering, a five-year 5% bond coupon with 10% first loss protection, means payment to investors is guaranteed. “This has helped people who are reluctant to invest by adding a layer of protection,” Blain says.
As the fund nears completion on its first 15 engagement projects, positive results are already obvious. “Although projects focused on one area of business in each company, it is abundantly clear that the projects have a snowball effect of initiating a company-wide gender mainstreaming movement,” Blain says. “For example, a portfolio company in Mexico formed two new committees, a Gender Committee and Talent Committee, to promote diversity, equity and inclusion throughout operations and women’s leadership in particular. They also developed two new policies focused on sexual harassment and violence and gender and inclusion, to complement their intentions with specific documentation and guidelines.”
With such a strong track record, Deetken is now able to choose which companies to invest in going forward. “Opportunities now come to us,” Blain says. “With $200-million Canadian under management, we can centralize the deal pipeline, and evaluate which funds might be the best fit for each opportunity.”
ILU is closed to new investors, but will re-commence raising capital in 2023. Contact a Genus Portfolio Manager to find out how to build your own impact portfolio.
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