September Edition | Avestix Fortuna

Dedicated to empowering women in finance, with a particular emphasis on commercial real estate, emerging technologies, and the evolving landscape of women's roles in investing and finance...

Sep 03, 2024

Worldwide, Women Are Emerging as Leaders, Educators Shaping the Future

In a recent African Business article, Nobel Prize winner and former President of Liberia, Ellen Johnson Sirleaf, reminded readers that “young leaders, and particularly women leaders, will be the engine of future growth, sustainable development, and prosperity on the condition that we give them the tools, opportunities, and space to do so.”

Sirleaf was referring specifically to young African women, but her call for women to be given the support and resources they need to meet their full potential as teachers and leaders is universal.

“Women and girls must be offered equal access to quality education, employment, and training opportunities that put them on an even footing with their male counterparts,” she wrote. “Through quality education and training, leadership roles in all spheres of life can be attainable goals for … women and girls.”

Indeed. There is no argument that — to ensure full parity between women and men — women around the world should be permitted to access the same resources, educational opportunities, and earnings that their male counterparts enjoy. By doing so, it can help ensure that women can assume their rightful place as leaders and educators around the globe.

How are women reshaping the world? Read “Data Reveals VC Firms That Include Women Decision-Makers See Higher Levels of Success.”

In one area — education — women appear to be well on their way, at least in the U.S. According to data from The Pew Research Center and the World Economic Forum, women now represent most of the college-educated workforce in the United States. Yet, even though women have increased their numbers in the college-educated labor force since 2019, data confirms there has not been much change in the gender composition of the U.S. workforce.

The good news is, that, despite this disparity, there are many success stories worldwide where women are already emerging as leaders and educators.

Take the relatively nascent industry around blockchain and blockchain-adjacent projects. While for many, the blockchain, crypto, and non-fungible token (NFT) industries bring to mind a male-dominated, “bro-culture,” many women are coming into their own as influencers in the space. Blockchain Magazine recently profiled 10 women who are “making significant contributions, fostering innovation, and driving positive change.”

Among the women Blockchain Magazine identities as leading the charge are Layah Heilpern, Sheila Warren, Oluchi Enebeli, and Lisa Francoeur. According to the publication, they and others “are playing a crucial role in educating the public about blockchain technology and its applications, helping to demystify complex concepts and drive mainstream adoption.”

Similarly, last year, Time profiled six women who are “shaping the future of artificial intelligence (AI). Among them is Fei-Fei Li, a Stanford University professor who, among other things, recently urged President Biden to adopt a “moonshot mentality” with regards to spearheading a national policy around AI.

Additionally, Time profiled Sneha Revanur, founder of Encode Justice, a youth-led nonprofit dedicated to developing safe, equitable AI.

“My peers and I are determined to do more than just inherit that world,” Revanur told Time. “We’re actively co-creating it.”

But it’s not just women in budding industries helping to usher in the next generation of technology. The UN Refugee Agency (UNHCR) — whose mission is to provide nutrition, clean drinking water, shelter, and other forms of relief to blight-stricken areas around the globe — recently spotlighted five female refugees shaping the future of STEM.

According to the UNHCR, all five women “are passionately pursuing their dreams in STEM and inspiring others to do the same.”

One woman UNHCR profiled is Deline Ramiro Yihumutima, a 23-year-old Rwandan refugee who serves as the Operations and Partnerships Lead at Solidarity Initiative for Refugees (SIR), a community-based organization in Kenya. In her role, she introduces other refugees to digital education and online STEM opportunities so that they can carve out a dignified living.

“I believe in the power of perseverance and the importance of working towards a better future,” Yihumutima tells the UNHCR. “No matter the obstacles that may stand in our way."

Her resilience and dedication echo a recent social post from Ellen Johnson Sirleaf: “To advance gender equality in public leadership, we must understand the current state of play, celebrate the women who are succeeding despite the odds & assess how we are all contributing to driving change.”

Want to know more about how women are reshaping the world? Read “Data Reveals VC Firms That Include Women Decision-Makers See Higher Levels of Success.”

Despite the Promises of AI, Gender Bias Remains a Problem

In a past article, I shared findings that predict generative artificial intelligence (AI) has “the potential to generate value equivalent to $2.6 trillion to $4.4 trillion in global corporate profits annually.”

It’s no secret that AI is growing exponentially and is poised to transform nearly every industry in the world, but it’s important to remember AI modeling is far from perfect. Like all of us, the people who do AI modeling are imperfect.

In 2021 Genevieve Smith and Ishita Rustagi warned us about how this imperfection. In “When Good Algorithms Go Sexist: Why and How to Advance AI Gender Equity,” they wrote, “AI systems are biased because they are human creations. Who makes decisions informing AI systems and who is on the team developing AI systems shapes their development.”

In other words, the people who develop AI systems bring their biases to work (as we all do), but in the case of AI, such biases can trigger real-world consequences.

“Many institutions make decisions based on [AI] systems,” Smith and Rustagi wrote. “These systems inform how much credit financial institutions offer different customers, who the healthcare system prioritizes … and which candidates companies call in for job interviews. Yet gender bias in these systems is pervasive and has profound impacts on women’s short- and long-term psychological, economic, and health security.”

The reason for the gender bias? Smith and Rustagi believe it’s because “only 22 percent of professionals in AI and data science fields are women — and they are more likely to occupy jobs associated with less status.”

That was three years ago. Since then, the global AI market has more than doubled, making it easy to imagine that the gender bias has flattened.

But that doesn’t appear to be the case. Earlier this year, Zeki, a U.K.-based talent platform, released Women in AI 2024, a report that surveyed more than 33,000 female professionals in 109 countries. Although Zeki found female professionals are “making their mark” in AI (especially in the U.S., which is the “main driving force behind most of the discovery and development … in AI today”), it also determined that only about 7,000 women in the U.S. are currently active in AI, which represents 22 percent of global female AI talent pool. Meanwhile, women account for 36 percent of the AI workforce in Taiwan and 26 percent of AI workers in Australia are women.

Zeki also found that “despite the consistent quality of the research contributions, women in AI gain less visibility and recognition as their careers progress.”

The fact that women continue to play supporting roles in AI innovations might explain why they feel less invested in the technology.

In 2024’s How Generative AI Is Transforming Business And Society, Oliver Wyman determined that 59 percent of male workers between the ages of 18-65 around the globe use generative AI tools at least once a week, while only 51 percent of their female counterparts use them. This disparity is even greater among younger workers: 71 percent of men ages 18-24 leverage generative AI weekly, compared with 59 percent of women.

Meanwhile, Oliver Wyman predicts that generative AI could contribute nearly $20 trillion to global GDP by 2030 while saving employers $300 billion in work hours annually.

These projections only apply if companies and workers fully embrace the technology. For AI to live up to its full potential, a greater effort must now be made to ensure that more women have a place at the AI innovation table.

Do AI and other cutting-edge technologies have a place in your investment strategy? Contact Avestix to Find Out.

Women Realtors May Be Hit Especially Hard by New Real Estate Rules

A slew of new rules recently took effect that are poised to permanently reshape how residential properties in the U.S. are bought and sold and how much realtors — most women — earn from the transactions.

The new rules, which went into effect August 17, cover much ground. Included in the changes: selling agents who list properties for sale on a Multiple Listing Service (MLS), will no longer be able to use the MLS to offer a commission to buyer's agents. Another new rule eliminates the requirement that brokers subscribe to multiple listing services. Meanwhile, buyer’s agents must now enter into written agreements with their customers.

More Bargaining Power

For consumers, the biggest impact may be the changes to the commission structure agents use to bill for their services. The commission changes are intended to give home buyers and sellers more bargaining power when working with realtors.

The changes can be traced back to October when a federal jury determined that the National Association of Realtors (NAR) “conspired to require home sellers to pay the broker representing the buyer of their homes in violation of federal antitrust law,” The court determined that the NAR’s commission structure infringed on antitrust laws because it forced home sellers to pay a fee that could be passed along to buyers. As a result of the verdict, the NAR agreed to modify its commission structure as part of a $418 million antitrust settlement.

Before the changes, commissions — normally billed to the seller — could run as much as 6 percent of the selling price and be divided between the two agents involved. The court determined the commission structure was inappropriate.

Feeling the Pinch

Although the updated rules are intended to give consumers greater power to negotiate fees, not everyone is convinced.

One University of San Diego real estate professor told the LA Times he doubts the new rules will drive commissions lower.

“I haven’t seen anybody advertise [lower commissions] — either on TV, social media, magazines, newspapers — suggesting that [agents] are going to compete on price,” he said.

However, a nationwide consumer group told the newspaper that it's advising “buyers and sellers [to] set a goal of negotiating commissions of 2% of the sales price.”

CNN, meanwhile, quotes one source who predicts “real estate commissions [could] fall 25 percent to 50 percent.”

If that prediction proves accurate, U.S. realtors will likely feel the pinch — especially women realtors.

Why? Because, according to the NAR, sixty-two percent of U.S. realtors are female. And their role in the industry is evolving. If real estate commissions fall by half, women will be especially impacted.

What will this mean for women realtors?

Reduced Income: If commissions drop from 5 percent to 2 percent, the amount a broker earns from a $100,000 deal would go from $5,000 to $2,000, which will undermine the livelihood of all realtors, men, and women.
Barriers to Entry: Lower commissions may discourage prospective realtors from joining the industry, especially women who already face wage disparities in every industry, according to the U.S. Department of Labor.
Financial Inequality: Because male realtors likely have larger professional networks than their female counterparts, men may get exposed to more lucrative deals, further increasing income disparity.
Increased Pressure: To maintain previous income levels, agents will need to close more deals, likely meaning increased pressure and longer hours. For women agents, this shift could upset a work-life balance and family time.
A Shift in Focus: Women brokers may concentrate on higher-value transactions or diversify their services to make up for reduced commissions.

Although it’s unclear how the new residential real estate rules will play out across the industry, the changes clearly will impact real estate commissions. And, since most agents are women, it’s just as likely they will feel a financial squeeze in an already uncertain economy.

Impact investing - What Does it Mean?

Investing is about generating positive returns, but “impact investing” carries a coequal goal: creating a positive societal impact.

Investopedia defines “impact investing” as “making investments to help create beneficial social or environmental effects while also generating financial gains.” Simply put, impact investors opt to put their money where their heart is and invest in asset classes — stocks, bonds, mutual funds, venture capital, real estate funds, etc.— that aim to help facilitate positive social outcomes.

These two goals — making money while supporting social enhancements — need not be mutually exclusive.

According to the Global Impact Investing Network (GIIN), — one of the world’s most established and lucrative non-profit networks — impact investors are usually willing to sacrifice higher return expectations for what they perceive to be the greater good.

“Some intentionally invest for below-market-rate returns, in line with their strategic objectives,” the GIIN explains. “Others pursue market-competitive and market-beating returns, sometimes required by fiduciary responsibility.”

In completing its 2023 Annual Impact Investor Survey, the GIIN found that among the social-impact investors the organization surveyed, most were willing to settle for “competitive, market-rate returns.”

Similarly, Fidelity Charitable determined that “investing for impact doesn’t necessarily mean you have to compromise financial returns.” The charitable arm of Fidelity cites “numerous studies” that “have looked at the performance of impact investments and found that investing in sustainability has usually met, and sometimes exceeded, the performance of traditional investments.”

This is not to suggest that social impact investing is without controversy.

Last year, researchers from the Harvard Business School released “What Do Impact Investors Do Differently ?” in which the authors looked at how hundreds of social impact investment funds — pools of capital designed to enable social and environmental benefits while generating returns — performed. Among the report’s findings: to more effectively manage the risk inherent with many impact investments, some fund managers engage in “additionality"— supplementing their impact investments by raising capital from “traditional,” for-profit investment sources. As a result, HBS found that “Impact investment funds mostly buy stakes in companies that traditional financiers would have funded anyway.”

In other words, managing a portfolio of impact investments requires just as much strategic planning and compromise as traditional portfolios do.

This did not exactly come as a surprise to me. For more than 35 years, I have managed several financial services organizations, specializing in corporate finance, technology, commercial real estate, venture capital, and public market investing. I have founded firms on three continents and am a serial entrepreneur.

But I am also a humanist and philanthropist.

Beyond my professional achievements, I remain committed to philanthropic initiatives that include helping at-risk children, empowering women, driving sustainable development, and fostering global progress in the U.S., Africa, and multiple emerging countries.

If you share these interests and goals and would like to discuss impact investing opportunities that address causes such as these, contact Avestix at invest@avestix.com.

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