Platform will help public and private investors find and connect with each other to co-invest in blended finance deals in emerging and frontier markets
20 January 2016 – DAVOS-KLOSTERS, SWITZERLAND
Convergence officially launched today as the world’s first deal sourcing platform that helps public and private investors find and connect with each other for blended finance investments in emerging and frontier markets. Convergence will enable more investment in these markets by leveraging public and philanthropic funding to unlock billions of private sector dollars for global development – which can lead to a 10x increase in overall investment.
By allowing investors to quickly search databases for credible deals or co-investors that match their investment needs, Convergence will broaden investors’ networks and simplify their screening process.
“Convergence will introduce a new, collaborative approach to emerging market investing. It will become much easier for investors to find high-quality transactions in emerging markets that will allow them to leverage their dollars towards greater economic, social, or environmental impact,” said Joan M. Larrea, who will become Convergence’s first CEO effective February 15. Ms. Larrea joins Convergence from Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance agency, where she led efforts to partner with private sector investors. Prior to OPIC, she served as managing director at Global Environment Fund, a global alternative asset manager dedicated to the energy, environmental, and natural resources sectors.
To identify, encourage, and support blended finance investments, Convergence will:
- Connect credible private, public, and philanthropic investors with one another, to co-invest in deals posted on the platform;
- Provide over $7M USD in grant funding to practitioners to design innovative finance products that would otherwise be too risky or complex to pursue; and
- Ease the investment process for both new and experienced investors through a range of practical tools and resources on how to structure blended finance transactions and streamline the investment process.
Convergence has wide-ranging cross-sectoral support, including funding from the Government of Canada and Citi Foundation, a Board and Advisory Committee whose members hail from organizations ranging from MasterCard Worldwide to the Government of Ethiopia, and pioneer users across all sectors and geographies – for example, the Bill & Melinda Gates Foundation, Black Rhino, CDC Group, Citi, the Korea International Cooperation Agency, the Netherlands Development Finance Company, and Root Capital.
The Honourable Chrystia Freeland, Canada’s Minister of International Trade, announced the launch of Convergence at the World Economic Forum’s Annual Meeting in Davos. “Today, we are making it easier for public and private investors to pursue purpose-driven investing and find co-investors. Convergence is a tremendous and innovative way to encourage more development financing, which will in turn lead to economic growth and stability. Toronto-based Convergence demonstrates how Canada continues to be a world leader and pioneer in blended finance,” said Minister Freeland.
“Citi is proud to support this exciting and innovative access and content channel for the global investment community,” said Peter Sullivan, Head of Citigroup’s Africa Public Sector Group. “From the onset of the project, Citi and the Citi Foundation strongly supported the development of Convergence, which we believe will help the blended finance market grow and increase capital flows for global development, particularly in emerging markets.”
Blended finance investments facilitated through Convergence will magnify the impact of public and philanthropic investors’ funding by attracting additional private capital towards investments that deliver social, economic, and environmental impact. At the same time, public and philanthropic investors’ participation in these investments can reduce risk and enhance returns of emerging and frontier market investments for private investors.
“As the global economy shifts, a platform like Convergence is critical to make it easier for corporations and institutional investors to invest in growing markets, while also supporting economic development around the world,” said Walt Macnee, Vice Chairman of MasterCard Worldwide and Chairman of the Board of Convergence.
The platform will play a particularly important role in driving investment to close the estimated $2.5 trillion gap in funding for the Sustainable Development Goals (SDGs) which will guide the next 15 years of development around the world. Marie-Claude Bibeau, Minister of International Development and La Francophonie in the Government of Canada, which has committed $20M CAD to the effort, commented: “Canada remains a leader in innovative approaches to financing for development. Canada’s support of Convergence exemplifies this commitment given that the platform will mobilize private sector resources and expertise to help the world’s poorest and most vulnerable people, which will be a crucial factor in achieving the United Nations’ Sustainable Development Goals.”
David Creighton, Vice Chairman of Cordiant and a Convergence board member, commented, “Convergence has the potential to be transformative for asset managers and private investors alike by introducing an innovative new platform to facilitate access to high-quality opportunities and catalyze significant–and sustainable–developmental change in emerging and frontier markets.”
Conceived under the World Economic Forum and OECD-DAC’s ReDesigning Development Finance Initiative, Convergence was designed and launched by the Global Development Incubator and Dalberg Global Development Advisors and is now an independent organization headquartered in Toronto.
Convergence is pleased to have pioneer users from the following institutions:
- Bamboo Finance
- Bill & Melinda Gates Foundation
- Black Rhino
- CDC Group
- Ceniarth LLC
- Chanzo Capital
- Crossboundary Energy
- D. Capital
- Developpement International Desjardins
- Enclude Capital
- Global Affairs Canada
- Government of Ethiopia
- Government of Netherlands
- Grassroots Business Fund
- Impact Investment Partners
- Inside Capital
- KB Investment & Securities
- Korea International Cooperation Agency (KOICA)
- Lundin Foundation
- Mercy Corps
- Netherlands Development Finance Company (FMO)
- Palladium Group
- Root Capital
- Sarona Asset Management
- Social Finance
- Swedish International Development Cooperation Agency (SIDA)
- United States Agency for International Development (USAID)
Institutions interested in becoming a user on Convergence’s Investment Network can register at www.convergence.finance today.
For more information, please contact: Convergence Media Office [email protected]