Innpact is an impact finance management platform providing fund management, advisory, impact management, and structuring services to impact finance actors globally. Established in 2007, they have built a strong track record in designing and implementing impact funds and blended finance vehicles. To date, Innpact has supported investments exceeding $10 billion. Their work includes helping impact vehicles come to market and supporting the broader ecosystem around them.
We spoke with Etienne de Belloy, Associate Director, Fund Management at Innpact about their blueprint for an evergreen blended fund structure, market building initiatives, challenges they have faced, and more.
Tell us about the Global Gender-Smart Fund (GGSF). How does the fund use blended finance?
The GGSF is an evergreen blended finance debt fund and the successor strategy to the Microfinance Enhancement Facility (MEF), with the new structure effective from 1 January 2024. It provides debt financing to financial institutions in developing markets to expand access to finance for underserved women and women-owned or women-led businesses. It is paired with a technical assistance facility to help partner institutions strengthen their gender practices. Innpact acts as alternative investment fund manager and global portfolio manager, while Incofin, responsAbility, and Triple Jump manage portfolio sourcing, relationships, and investment decisions.
The fund has a blended finance structure with junior equity providing protection against credit and foreign exchange losses, with an additional strong senior equity base from development finance institutions (DFIs). The fund then offers subordinated and senior notes, with subordinated notes being subscribed by both private and public investors, while senior notes are reserved for private investors, such as M&G Investments, in order to maximize the leverage provided by the junior and senior equity holders. The fund’s shareholders include the German Federal Ministry for Economic Cooperation and Development, KfW Development Bank, the International Finance Corporation, the Development Bank of Austria, and the government of Sweden. The fund maintains strong risk ratios whereby junior equity needs to account for at least 17% of total assets, junior and senior equity to at least 40% of total assets, and junior and senior equity and subordinated notes to at least 60% of total assets.
Innpact has developed a blueprint for an evergreen blended fund structure that has been replicated over and over again. What are your views on the replication and mobilization of private capital at scale?
We believe replication is one of the most practical ways to mobilize private capital at scale. Our experience structuring evergreen blended vehicles, such as the European Fund for Southeast Europe, the Global Climate Partnership Fund, the Regional MSME Investment Fund for Sub-Saharan Africa, &Green, and the MEF, as well as its conversion to the GGSF, demonstrates that a strong core model can be adapted across sectors and markets without the need to start from scratch each time.
How do your market building initiatives, such as Octobre, Impact Channel, MIRA, International Climate Finance Accelerator (ICFA), and International Social Finance Accelerator (ISFA), support your blended finance work?
These initiatives support blended finance across the fund life cycle. ICFA and ISFA are accelerator programs that help emerging managers become investment-ready; Impact Channel connects impact fund managers with investors; MIRA supports impact, environmental, social, and governance, and sustainable finance disclosure regulation reporting; and Octobre works on the liquidity side. Together, they address several points of friction that can hold private capital back from participating in blended finance.
What has Innpact been able to activate through its blended finance approach?
Blended finance has helped bring together stakeholders who would not usually invest through the same structure, while creating room for clearer risk-sharing, technical assistance and, in many cases, local currency financing. In GGSF, for example, the structure combines support from DFIs and donors with private sector participation, including $250 million investments in senior and subordinated notes from M&G Investments and other private investors. Octobre addresses another barrier to private capital by offering liquidity options for otherwise illiquid impact fund positions.
How do you measure the impact and success of your blended finance transactions?
We typically look at success on two levels: whether a transaction mobilizes the right kind of capital, and whether that capital contributes to meaningful outcomes for end-beneficiaries and investees. In practice, this means starting with a clear impact thesis, tracking agreed indicators, collecting and aggregating data regularly, and reviewing data quality through due diligence, monitoring, and ongoing engagement.
What are some interesting or unexpected challenges you’ve faced in the blended finance space?
One of the main challenges is alignment. Blended finance often brings together stakeholders with different priorities, time horizons, and reporting expectations, so the real work is not only in the capital structure but also in building governance and processes that remain practical and credible for everyone involved. Ensuring alignment between the various investors in a blended finance fund often requires lengthy negotiations, despite our continuous efforts to standardize legal documentation.
How do you see Innpact’s blended finance activities evolving in the future?
We see blended finance becoming more repeatable, more data-led, and more closely linked to the wider market infrastructure around impact funds. As an impact finance management platform, Innpact’s direction is to combine fund structuring and management with stronger reporting, distribution, liquidity, and manager support across themes such as gender, climate, nature, and financial inclusion.
