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Sallie Krawcheck Opens an Index Fund Focused on Women
When Sallie L. Krawcheck, a former big bank executive, bought a women’s network last year, she said she wanted to “move from advocacy of women to the smart business of real investment in women.”
Now those plans are starting to take shape.
Ms. Krawcheck announced on Wednesday that her organization would team up with Pax World Management, a fund management company, to offer an index fund focused on companies where women make up a significant portion of officers and directors.
At the same time, her organization, 85 Broads, is changing its name to Ellevate, a nod to its focus on women. (The original name was a reference to the address of the former headquarters of Goldman Sachs on Broad Street in Manhattan, where the founding members worked.)
Ms. Krawcheck, who once held executive roles at Bank of America and Citigroup, said she decided to go into the index fund business after conversations with the Ellevate members.
“They very much, by joining the network, want to invest in themselves,” Ms. Krawcheck said in an interview. “But a very significant number of them want to invest behind other women.”
The fund is effectively a joint venture between Ms. Krawcheck and Pax World Management. With a new company she and a partner created, Ellevate Asset Management, Ms. Krawcheck bought a stake in the manager of a fund called the Pax World Global Women’s Equality Fund. Under the deal, the fund is now the Pax Ellevate Global Women’s Index Fund.
The fund focuses on a selection of companies that are culled from a global index according to the gender diversity of their top ranks. The top holdings include PepsiCo, where Indra K. Nooyi is the chairman and chief executive, and Lockheed Martin, where women make up a third of the board.
Ms. Krawcheck said the women in the Ellevate network – and women in general – wanted investments that delivered a “fair return” as well as an “impact.” She cited research suggesting that companies with a higher portion of women in senior roles tended to perform better than companies with less gender diversity.
After leaving Bank of America in 2011 amid a management shake-up, Ms. Krawcheck has become involved in start-ups like the online broker Motif Investing and built followings on Twitter and LinkedIn. In May 2013, she bought 85 Broads from its founder, Janet Hanson, a former executive of Goldman.
The newly renamed Ellevate plans to invest a portion of the dues it receives into the index fund, Ms. Krawcheck said. In addition, women in the network will be able to receive a discount on any personal investments in the fund by investing as a group.
“This fund is the first of its kind – and is the only mutual fund in the United States that focuses on investing in the highest-rated companies in the world in advancing women’s leadership,” according to a new website for the fund.