The Review — 27/06/2018 at 15:00

Leveling the Playing Field for Female Investors by Goldman Sachs

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Goldman Sachs announced the creation of Launch With GS, a $500 million investment in both companies founded, owned or led by women, and women private equity managers, including those starting their first funds. The latter component will be led by Suzanne Gauron, managing director in the firm’s Alternative Investments and Manager Selection (AIMS) business. She explains why Launch With GS is tackling diversity in the investor community and her hopes for the program.

What’s the challenge you’re hoping to solve through Launch With GS?

Suzanne Gauron: Unfortunately, investing is not a very diverse industry today. In the alternatives space, it’s common to see a lot of homogeneity at established firms. There’s a lot of research showing that unconscious bias hinders women’s ability to raise capital, and that there’s value in having all types of diversity in decision-making and investing decisions. So first, we’re hoping to increase the focus on gender imbalances within our industry. And second, we want to use capital to affect the supply-and-demand dynamics — increasing the number of women investors, while generating meaningful proof points for women’s investment performance.

You’ve emphasized that you’ll be seeding new managers. Why is a first fundraising so important?

SG: Any investor who’s raising her own fund is taking a lot of business risk as an entrepreneur. But we want people to feel like the playing field is level. The acute challenge that new managers have is figuring out how to build relationships with a few key investors who understand their background. And that takes time. Nobody wakes up one day ready to start their own firm. But the AIMS team has been seeding new managers for a decade. We have a track record and process that other investors understand. By providing a new manager her first capital, we often can get her over the hump and attract subsequent investors. And we also provide support and guidance on all the other things beyond investing. Our goal is to give new managers the best possible insights about how clients will perceive their product and how they can be successful.

Where are you seeing the most opportunity?

SG: It’s a great time right now for new manager formation. We’ve had more conversations in the last year than we’ve ever had because it’s a strong private equity market and many successful firms are going through generational transitions which evolve their teams. In the last couple of years, for example, we’ve seen interesting newly formed specialist managers who are focused on opportunities in the energy, consumer and technology sectors given the dislocations and disruptions in those markets. We’re highly selective; we’re looking for investors with training, a track record and specialization. A lot of these investors are identified through referrals and introductions from the GS network.

What kind of impact can you have through Launch With GS?

SG: We think Launch With GS can play an important role for the managers and the entrepreneurs we work with, but we’re most excited about building an ecosystem. Clients want more diversity in their portfolios, and they also see an investment opportunity given the massive inflows into private markets over the last decade. We’ve also received incredible response in just the short time since our announcement from some of the many organizations already working on the gender investing gap. We want to bring all these groups together — men and women, companies, entrepreneurs, managers, clients and people from the firm. That is a network which we hope will give women we work with a competitive advantage.


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