The mobilization of institutional capital is central to the purpose and future of blended finance. Current stable blended finance flows will mobilize “billions to billions” rather than “billions to trillions” largely due to the under-participation of institutional investors in blended finance to date.
This brief analyzes how institutionals have participated in blended finance, and presents insights drawn from interviews conducted with key industry stakeholders.
The Convergence database has recorded 150 blended transactions, each with a commitment from at least one institutional. Given that pension funds and insurance companies often participate in blended finance through asset management firms that are either directly affiliated with them (e.g., AXA Investment Managers), or that simply manage funds on their behalf, ‘institutional investor’ is defined broadly here. It refers to an organization tagged in Convergence’s database as: (i) a commercial investor, and (ii) either a pension fund, an insurance company, an asset manager, an investment manager, an investment fund / facility, or a family office.