The Call
How commercial investors are streamlining blended fund structures
Guests on this call:
- MacArthur Foundation’s Debra Schwartz
- Climate Fund Managers’ Rajashree Padmanabhi
- Mitsubishi UFJ’s Ariane Pevide
- Convergence’s Nnamdi Igbokwe
The discussion was hosted by David Bank and co-hosted by Dennis Price, both from Impact Alpha, who guided the conversation and introduced topics for discussion.
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What's covered on this call:
- Blended Finance Evolution: The panel discusses the slow progress of blended finance, yet highlights recent signs of growth and inflection points as institutions bring larger-scale deals to the table.
- The Blending Process: The conversation covers how blending billions in capital requires layering different forms of risk and return, including concessional capital, private institutional investment, and guarantees.
- Showcase Deals: Specific funds such as the “SDG Loan Fund,” “Climate Investor One and Two,” and the “Gaia Fund” are examined. Each showcases innovative approaches to mobilizing funds, particularly in the climate sector, by combining public and private capital.
On the call, we discuss how catalytic capital (capital used to drive more significant investments) works, what it aims to solve, and the various structures that make these deals attractive to institutional investors. The panelists also discuss the practical implications of risk-sharing mechanisms, like first-loss capital, and how these enable larger-scale investments in emerging markets and infrastructure projects.