Improving Gender Diversity in the Investment Community: An Interview with Katherine Jollon Colsher, President and CEO of Girls Who Invest
December 15, 2021 – By Jared Mueller, Director – Mayo Clinic Innovation Exchange
The march toward greater gender equity has progressed unevenly across fields. While at least one out of every three U.S. physicians and attorneys are women, more than 90% of senior private equity investors or mutual fund portfolio managers are men. As of 2020, fewer than 5% of venture capital (VC) partners were women. The stark gender imbalance among capital allocators is also reflected in the share of venture capital dollars going to women-founded startups. In every year between 2010 and 2020, fewer than 15% of venture capital dollars have gone to companies with even a single woman founder. Fewer than 3% of dollars have gone to firms with all-female founding teams — while more than 85% of dollars have gone to startups with no women among their founders.
Girls Who Invest (GWI) is a non-profit organization dedicated to transforming the investment management industry by attracting and advancing women investors, changemakers, and leaders. Launched in 2015, GWI is focused on increasing the pipeline of women in frontline investing positions through education, mentoring, internships, and a supportive community. Their vision is to have 30% of the world’s investable assets managed by women by 2030.
Katherine Jollon Colsher is the President and Chief Executive Officer of Girls Who Invest. Prior to joining in 2020, she was a Managing Director at Goldman Sachs and the National Director of their 10,000 Small Businesses initiative, Goldman Sach’s largest-ever philanthropic effort to help entrepreneurs create jobs and economic opportunity by providing access to education, capital, and business support services. Katherine earned a BA in English, magna cum laude and Phi Beta Kappa, from the University of Richmond, and currently serves on the board of the Center for American Entrepreneurship.
Q: From its early days, GWI has had a focus on intersectionality — and works to support students from under-represented backgrounds and non-traditional majors. What are the demographics of GWI’s student participants, and how are you working to support their careers in finance?
KJC: Championing students from different backgrounds and introducing them to the investment management industry is what we’re all about. We work day-in and day-out to reach first-year and sophomore women who might not be familiar with the world of finance. And then it’s our responsibility to educate them on why investment management is such an incredible industry and career and to support their near-, mid-, and long-term goals.
Our students, specifically our 1,400 alumni, come from 150+ different U.S. colleges and universities and 70+ different majors. Within our Summer Intensive Program, which pairs four weeks of education with a seven-week internship, 69% of our alumni are women of color and 22% come from socioeconomically disadvantaged backgrounds. We’ve set a goal of having at least 25% of our Summer Intensive Program scholars come from historically underrepresented communities by 2025.
We have a robust Career Development Model to support our alumni as they embark on and advance their careers in the industry. Our career development services include deep dives on different asset classes, unconscious bias training, interview preparation, résumé review, mentorship within our community, and much more. We aim to show our alumni that they are not alone as they advance through the industry.
Q: Bloomberg’s Jackie Davalos this year reported that FemTech has been “long-ignored by investors,” even though women “make 80% of health care decisions in the U.S… and spend 29% more per-capita on health care than men.” Many believe that the mostly male demographics of venture capital partners contribute to the disconnect — and consequently, to the slower development of life-saving technologies for women (or of solutions developed by women-led teams). What are other major challenges that GWI is tracking, when it comes to costs that society at large pays due to the lack of gender equity in investing careers?
KJC: One concerning trend we’re monitoring is that despite women controlling more and more wealth, there are very few women in frontline investing positions. One recent report suggests that two-thirds of all wealth will be in the hands of women by 2030, but if they’re not making decisions at the investment level, then that means their interests aren’t being represented, and that’s a highly discouraging imbalance. This is why our vision is for 30% of the world’s investable capital to be managed by women by 2030.
Also, study after study has proven that gender diversity — and diversity in general — leads to better investment performance, and this is now much more widely understood than even a few years ago. A must-read book is Ellen Carr’s and Katrina Dudley’s Undiversified: The Big Gender Short in Investment Management. Carr and Dudley discuss barriers to entry, as well as to retention and promotion.
We’re fortunate to partner with over 100 leading investment management firms to work together to address these issues and we’re tracking progress at the macro level and also through the lived experiences of our alumni. 75% of our Summer Intensive Program participants stay in the industry after that very first internship, which is an incredibly high return.
Q: Much as certain medical specialties are ahead of the curve (or laggards) in terms of gender diversity, private equity and venture capital are fields that tend to lag other corners of the investment management industry. As it expands and refines its programming and its support for GWI alumni, is GWI exploring new sector-specific programming for the alternative investment sector?
KJC: Absolutely. In 2021, our alumni community grew to more than 1,400 women, which was a tipping point for our reach across all asset classes, including alternatives. We’ve always had scholar and alumni programming on key trends and issues such as panic investing, the influence of artificial intelligence (AI) and big data, and environmental, social, and governance criteria (ESG) and climate change. Moving forward, we’ll introduce more asset class-specific content and affinity groups.
Our alumni already organically convene around their areas of shared professional expertise, including the hedge fund, private equity, and VC space. In fact, one of our alumni, Meagan Loyst, is an incredible example of how quickly we’re going to see the VC industry change thanks to leading talent. Meagan started a group called Gen Z VCs, which in just over a year has an astonishing number of members at more than 11,000! Our alumni are incredibly entrepreneurial and hardworking, and they’re literally changing the face of investing, as well as the culture.
Q: What breakthrough innovations in healthcare delivery or technology excite you most?
KJC: There are so many exciting things taking place that it’s hard to pick just one! But one area that’s very near and dear to us and our investment partners is ESG. It’s evolving and growing at an incredible pace and now understood to be a business imperative.
Investors of all stripes, from pension funds to endowments, high-net worth investors to millennials, are recognizing the investment and social potential in funding specific projects and companies. The global business landscape is being reshaped in real time and emerging tech is leading to breakthroughs in every industry. This, in turn, is creating jobs, very often outside the traditional hubs like Silicon Valley and NYC, and it’s all helping ESG to become an established part of modern investment portfolios. Just like emerging markets were once considered an alternative asset class, ESG is becoming more widespread and mature and the ramifications of this can’t be overstated.
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Views expressed by guests are their own and do not necessarily reflect the views of Mayo Clinic. As a not-for-profit 501(c)(3) charitable organization, Mayo Clinic does not participate in political activities.