Gender is a complex topic and one that is constantly evolving, as each generation seems to have different ideas and core beliefs about how gender roles impact our daily lives. According to Pew Research Center, 47% of the US labor force is made up of women, and women are (perhaps surprisingly) just as likely as men to work in managerial occupations and positions. In fact, women now control 30% of the world’s wealth, or $39.6 trillion. Because of this, you are now just as likely, if not more likely, to encounter female investors looking to participate in commercial real estate projects. Fidelity found that women tend to see .4% higher earnings from their investments than men, yet when they conducted a survey asking which gender was better at investing, only 9% of respondents said women.
With men and women both increasingly in a position to hold an investment portfolio, what is driving their decisions? Does gender play a role in how people choose to invest? Can CRE technology drive more gender parity in a traditionally male-dominant industry? Read ahead to find out!
So, What’s Different?
Stereotypes abound, but research does offer several key insights into gender-specific investment trends. A study out of Colorado State University found several correlations between gender-disposed behaviors and investing outcomes.
Women are generally less likely to take financial risks than men. A SAGE journal study found that women’s risk behavior tends to decrease under stress, while men generally become more likely to take risks when faced with a stressful circumstance. To put it plainly, investment risk is more of a deterrent to women than it is to men when it comes to making investment decisions. Men may be drawn to riskier projects than women if they perceive a higher ROI potential. Women, on the other hand, seem to prefer investment offerings with lower potential ROI if the risk profile is favorable.
Entrepreneur reports that 17% of women, compared to 13% of men, spend over a month researching their investment options before committing. This more cautious and informed approach may lead to better ROI over time because hasty decisions aren’t being made. The tendency toward research means that women especially value transparency and data-driven insights when making investment choices. If your firm is strategically positioned to meet these needs through leveraging CRE tech, this population of investors will be more inclined to trust you and commit capital. If not, you may get passed over in favor of a firm that offers detailed, real-time information to investors.
What’s the Same?
While there are some observable differences between men and women as investors, there are many more similarities.
Investors are Data-Driven
While women may tend to spend more time on their research, more up-and-coming investors are seeking out data than ever before. According to a TD Ameritrade survey, more than 87% of high-net-worth Millennials prefer to act solo or independently validate investment advice. With investors taking the power of information into their own hands, it’s likely that attracting investors of any gender will depend on the availability of data you choose to provide.
Transparency is a Priority
The need for transparency between sponsor and investors is universal. Maintaining positive investor relationships relies on the same principals as all other forms of relationship, and transparency is the basis of trust and effective communication. In fact, 63% of investors cite a degree of transparency as being an important consideration for their investment.
Technology is Non-Negotiable
As you consider what drives different segments of your investor population, be aware of how heavily technology influences their decisions. Fifty-nine percent of all investors begin their commercial real estate search online, and 60% use a mobile device to manage their investments. Up-and-coming investors of both genders come from a generational cohort that is accustomed to on-demand access to data and insights that drive their decision-making process 24/7. As a result, investor expectations have expanded, and this demand can only be met by leveraging technology. Simply having the data on-hand isn’t enough. The speed, accessibility, and transparency of technology are integrated into these investors’ everyday lives, making them the rule, not the exception.
CRE technology appeals to these broader expectations of both genders, while also providing the necessary on-demand data access that addresses any needs to reduce risk and do more in-depth research. In this way, gender disparities are minimized, and the broader investor population feels more comfortable committing capital.
Understanding your investors and anticipating their needs can be tricky. Gender certainly plays a role to some capacity in how likely investors are to commit to certain deals, with men more likely to jump in on deals with higher risk profiles and women more likely to take their time and avoid risk when possible. However, your investors all want and expect the same things from you. A trusting relationship formed on the basis of data-driven insights and access is likely to be the most important way to attract and retain investors, no matter their genders.
You may also be interested in this free eBook: Investor Expectations and Experiences