Global growth is increasingly being driven by emerging markets and developing economies (EMDEs) and institutional investors are beginning to recognize the significant long-term investment opportunities these markets present. EMDEs are expected to contribute more than 60% of global gross domestic product growth over the next decade, while over 85% of the world’s population already resides in developing countries (S&P Global, CNBC Africa). Despite these trends, many large institutional portfolios remain heavily concentrated in developed markets. Among four major Canadian pension funds reviewed, developed market allocations ranged from 77% to 89%, leaving comparatively limited exposure to EMDEs (CPPIB, CDPQ, PSP, BCI). At the same time, evidence suggests that sustainable private investments in EMDEs can offer competitive returns and diversification benefits. The International Finance Corporation (IFC)’s private equity portfolio has demonstrated 16% outperformance relative to the MSCI Emerging Markets Index, while emerging markets have outperformed developed markets in unlisted infrastructure debt over the past decade (IFC, GIIN). Against this backdrop, blended finance is emerging as a practical solution to help institutional fund and asset managers access EMDE opportunities through more risk-adjusted investment structures.
For Canadian fund and asset managers, the opportunity is becoming increasingly compelling, yet many still face uncertainty around navigating risk in unfamiliar market dynamics, the role concessional capital can play, and where Canadian investors can most effectively participate within a global development finance ecosystem that often feels removed from domestic investment practice. In this context, Convergence launched the Accelerator for Fund and Asset Managers (A4FM) in partnership with Global Affairs Canada (GAC) in June 2025, to strengthen the capacity of fund and asset managers to design, launch, and scale blended solutions that mobilize private capital to EMDEs. The accelerator program is designed to provide wraparound services through three components: (1) skills building for fund and asset managers in the form of virtual and in-person curated trainings, (2) catalytic grants up to CAD 500,000 to design, launch, and scale up blended solutions, and (3) acceleration support for successful applicants through access to tailored training, strategic investor and stakeholder engagement, and expert capacity building resources to fast track the design and scale-up process.
Following the delivery of a global virtual training in July 2025 and two Canadian-focused in-person trainings in Toronto (Q4 2025) and Montreal (Q1 2026), several consistent themes stood out, including the need to demystify blended finance for mainstream fund and asset managers, the importance of grounding global examples within the Canadian market context, and growing indications that investor interest is beginning to translate into momentum. The trainings reinforced that, while some fund and asset managers recognize the long-term opportunity presented by EMDE markets, many still have a limited understanding of blended structures and continue to perceive EMDE investing as complex or difficult to access. In Canada, the blended finance market is comparatively nascent. Canadian fund manager activity is sparse and typically geared towards niche markets, totaling roughly $3 billion in deal volume compared to approximately $19 billion across the top 10 global fund managers combined (Convergence Market Data). However, these trainings have illustrated growing interest among investors looking to better understand how these opportunities can align with and enhance their portfolios and investment strategies. A4FM is designed to help bridge this gap by combining practical training, catalytic grant funding, and acceleration support to help managers move from initial interest to more concrete fund design and investment strategies.
Demystifying Blended Finance for Fund and Asset Managers
While many participants came into the trainings with only a foundational understanding of blended finance, the sessions helped translate that initial awareness into a more practical and applied understanding of how blended structures operate in practice. Rather than framing blended finance as a niche or abstract development finance concept, the trainings focused on the core components most relevant to fund and asset managers, such as capital structures, risk allocation, concessional capital, guarantees, technical assistance, fund lifecycle considerations, and investor roles.
Participants responded strongly to practical content and noted that the sessions on structuring approaches, market trends, and case studies were particularly valuable. Fund managers not only need to understand why blended finance matters, but also how it works. The case studies highlighted examples of first-loss capital, concessional debt and equity, guarantees, sidecar technical assistance facilities, and design-stage grants allowing participants to connect the concept of blended finance to real investment structures. The trainings also highlighted how catalytic capital can be most effective when it is targeted to specific risks, such FX risk, early-market operating risk, political risk, or first-close uncertainty. Participants also found it encouraging to see investors supporting some of these structures that have successfully launched.
Grounding Global Examples in the Canadian Context
For Canadian investors, EMDE investing can sometimes feel like a global conversation happening elsewhere, led by development finance institutions, multilateral banks, or large international asset managers.
Discussions around Canada’s position in global blended finance league tables, the level of participation among Canadian fund managers, and the role of public and philanthropic actors underscored both the scale of the gap and the significant opportunity for Canada to play a more influential role in shaping and scaling the blended finance market globally. For many participants, seeing global blended finance structures alongside Canadian examples, institutions, and peers helped make the opportunity feel more relevant and actionable within their own investment contexts. The trainings helped show Canadian fund and asset managers where they fit within the market, how Canadian capital can play a more active role in blended finance, and how a stronger Canadian blended finance ecosystem could also support more investment flowing into Canadian firms.
Converting Investor Interest into Momentum
The trainings also indicated growing interest among participants about how blended finance could support investment strategies in EMDEs. Participant feedback and follow-up discussions reflected appetite for deeper engagement. Several participants expressed that the blended finance archetype case studies resonated strongly and indicated interest in considering whether the A4FM program could support development of investment strategies in EMDEs.
Questions raised throughout the sessions focused on practical considerations, including capital mobilization ratios, the distinction between design-stage and investment-stage grants, the role of technical assistance, how concessional capital evolves over time, and how fund managers approach sector selection and impact reporting. Collectively, these discussions reflected increasing interest in understanding how blended finance structures are developed, implemented, and evaluated within real-world investment contexts.
Final Thoughts
The sessions highlighted genuine interest in EMDE opportunities, while simultaneously surfacing the practical questions investors need answered before they can engage more actively. Fund and asset managers need practical tools, relevant examples, and support to navigate the perceived risks of structuring blended solutions. In Canada, where the market is still nascent, A4FM plays an important role in building capacity and confidence for fund and asset managers. Globally, including for managers based in EMDEs, the program can help translate local market knowledge and investment ideas into structured vehicles capable of mobilizing private capital at scale for development impact. On April 15, on the sidelines of the World Bank Spring Meetings, the first cohort of grantees was announced, reflecting this momentum through the support of six global and Canadian fund managers under the program.
With the right mix of examples, dialogue, and applied learning, blended finance and the A4FM program can help fund and asset managers better understand how to navigate EMDE markets and recognize the significant long-term investment opportunities these markets present for both portfolio growth and development impact.
The A4FM program is continuing to build on this early traction, with the first cohort of awardees moving forward, and the second call for proposals closing on May 25. Learn more about the program and apply here.
