HCAP’s Bhairvee Shavdia on Mission Investing, Lived Experience, and Equity

And what appealed to you about working in private investment firms?

At a private investment firm, you get to see if your investment thesis panned out and you have the opportunity to collaborate with portfolio management teams to grow their businesses. That interested me from a business standpoint.

But the investment landscape has numerous approaches to investing capital and realizing returns. I didn’t want to be in a role where I was buying companies and stripping assets rather than investing in the workforce. It didn’t sit well with me, especially with my lived experience of working several low-wage jobs during high school and college.

Through those experiences I formed relationships with my colleagues who were raising families while earning minimum wage and saw the challenges they faced. I wanted to be in a role that interested me and was also aligned with my values.

While I was at Columbia Business School earning my MBA, I came across the then relatively nascent field of environmental, social, and governance (ESG) investing—at that time called impact investing—for investment firms. Essentially, private equity firms with a double bottom line: financial returns alongside positive social impact.

And how does HCAP check those boxes for you?

HCAP, where I’ve been since 2015, is an impact investing fund focused on quality jobs. We invest in companies, and then we work alongside them to improve the quality of their jobs—maintaining continued engagement around measuring improvements in job quality.

That’s part of our Gainful Jobs Approach, an operational framework for understanding job quality standards at our portfolio companies, which are underserved, lower-middle market companies primarily throughout California and the western US.

Part of our method is to understand where a company stands in terms of job quality before we invest. We then work toward intentional improvement using a strategic roadmap with job quality improvement goals that we develop with our management teams.

It’s a challenge to gather and analyze data in ways that inform the work but don’t create undue burdens. We’re developing ways around these kinds of challenges.

One response is an app to help survey workers to build their voices into our assessments. More than 70 percent of the workers in the companies that make up our portfolio are low-to-moderate-wage earners, some of whom might not have access to a computer.

The app provides a survey for a smartphone that can be administered in different languages. It asks for responses to around 15 statements—e.g., I feel like my needs are met at work; I feel like I have all the tools and resources I need at work; and I feel my employer pays fair wages for my geography.

At the moment, we’re also focusing on ways to further incorporate diversity, equity, and inclusion into our quality jobs framework. We’re always aiming to do the work better, to be leaders in the field.

You’re a woman in a field that remains, even in 2021, dominated by men. What’s that like?

I thought there’d be more women in the field of private equity given the number of women going into finance at both of my universities. I guess I was a bit naïve about that. We’re starting to see more women enter these jobs, but still not enough in leadership positions.

The experience of motherhood is what really shifted my perspective—not just being a woman in private equity, but being a mother in private equity.

In 2017, when I needed paid leave for the birth of my daughter, I discovered HCAP, which was founded in 2000, didn’t have a formalized parental leave policy.

They had never needed one. That said, I had a tremendous amount of support from the partners to put something in place. But I was shocked that in a firm focused on investing in quality jobs, this basic aspect of job benefits had been overlooked until I asked.

My lived experience makes me sensitive to the challenges facing women—especially women of color. We need to address them.

Why don’t our portfolio companies have parental leave plans? What about childcare benefits and policies around consistent scheduling? How do we address pay inequity for women and people of color? How can we increase diversity within our management teams and at the company board level?

Other challenges faced by women and people of color in the industry on a day-to-day basis are subtle. And those reasons can be inseparable, but the result is the same. Being talked over at a meeting or being mistaken for the junior person on the team or feeling unable to be your authentic self.

As I have grown in my career and become more confident with my voice, I am better able to address these situations.

I believe that one of the silver linings of the COVID-19 pandemic for women in private equity has been the ability to work remotely and for employers to see firsthand that flexibility and remote work are viable options.

These measures, I believe, will go a long way toward recruiting and retaining women in the field. 

What would you say to organizations that don’t know much about impact investing or are hesitant about stepping outside traditional investment firms?

The last 10 to 15 years have seen significant innovation and expansion in the impact investing field. Investors have a tremendous number of new opportunities—from diverse first-time fund managers to platforms focused on donor-advised funds.

I hope philanthropies will investigate the many available options to invest their dollars in ways that meaningfully advance their mission.