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"The day that women and men have equal opportunity, my investment thesis stops being relevant. But unfortunately, I think that's going to take—at the rate we're going—eighty or ninety years. And that's longer than any portfolio I manage..."
This episode was recorded with the entire Novus firm in attendance, and includes an interactive Q&A at the end.
15 years ago, Patricia Lizarraga started noticing that women outperform as both CEOs and investors. The reason is simple: due to various institutional barriers, women have a more difficult time rising to the highest executive ranks in both financial institutions and non-financial corporations. This observation evolved into an investment thesis that Patricia calls “The Female Factor.”
According to Patricia’s thesis, when a woman can overcome these well-documented additional barriers and rise to the highest executive ranks, by default, she must possess additional leadership and performance characteristics versus the average executives who did not face the same barriers. Today, the vast majority of senior executives across all industries are men—and thus, a unique investment opportunity arises when one considers the consistent track record of female outperformance.
Patricia Lizarraga is the founder and managing partner of Hypatia Capital, an asset management firm focused on sponsoring CEOs and investors who are women. Hypatia is built on Patricia’s passion for finance, as well as her mission of supporting fellow women in leadership roles. Most recently, her team has focused on building a hedge fund index that isolates women-lead firm outperformance. (The Novus study mentioned in this episode about women-led fund outperformance can be found here https://www.novus.com/blog/celebrating-women-led-funds.)
“It is difficult to isolate performance in something like a private equity transaction because it's both the investor and the CEO, as well as their respective teams that create the value,” Patricia explains, “[With] hedge funds, it’s a different story because there's one decision maker who has final responsibility for pulling the trigger. So, when we started looking at hedge funds, where you have this ability to isolate decision making, that's where we felt we could really isolate the female factor.”
Patricia Lizarraga was born and raised in Peru. She attended Yale University and went on to receive an MBA from Harvard Business School. She began her career as a merchant banker at Allen & Company and Donaldson, Lufkin & Jenrette. In addition to Hypatia Capital, Patricia serves on the board, and chairs the Audit Committee of Credicorp, Ltd., and Banco de Creditodel Peru, the largest financial conglomerate in Peru.
Accomplished investors share their stories, mental models, and what market factors they’re paying attention to today. Host Andrea Gentilini of Novus unpacks what has helped them and hindered them on their diverse roads to success.