Online ‘blended finance’ investment platform targeting SDGs launched

Toronto-based Convergence aims to promote blended finance deals in emerging markets

An online matchmaking platform to connect investors to ‘blended finance’ opportunities addressing the UN Sustainable Development Goals (SDGs) in emerging and frontier markets has been launched by Convergence, a new Canadian government-backed body announced at last year’s World Economic Forum.

Convergence’s aim is to promote blended finance deals in emerging markets. It is based in Toronto and funded by the Government of Canada, Citi Foundation and Ford Foundation.

Blended finance is gaining prominence in the impact investment space. It is described by Convergence as “deals that use catalytic capital from public or philanthropic sources to increase private sector investment markets for global development impact”.

Convergence is seeking to support the market through grant funding to design innovative blended finance vehicles; alongside this it last month launched the Investment Network to match investors with suitable blended finance deals.

Speaking to Responsible Investor, Peter Stoute-King, Managing Director of the Investment Network at Convergence, said the online network already had 100 approved institutions with a mix of private investors seeking commercial impact-driven investments, and foundations and multilateral government institutions seeking to provide concessionary or subordinate capital.

On the platform, they indicate a range of seven investment preferences including regions, sectors, instruments such as equity, bonds or grants, deal size and return expectation.This information is used to align them with deals on the platform which also provide the same information. Stoute-King explains: “When there is a good alignment with investor interest – say a 5 out of 7 match on criteria we will reach out to both parties.”

All deals on the Investment Network are screened on areas such as having an anchor investor and avoiding controversial sectors. All deals also must be aligned with one or more SDG. Investors on the network have to be referred by another member.

Stoute-King said the Investment Network could help drive down costs for investors seeking opportunities in emerging markets. “There can be high transaction costs to source and invest in emerging markets such as regular travel On the Investment Network you can log into a profile and readily see opportunities in Africa, for example.”

Organisations currently on the online investor platform include the Gates Foundation, Australia’s Christian Super and UK development institution CDC Group.

Along with its Investment Network, Convergence will also work on educating institutions about blended finance through workshops and training. It is also providing grant funding to design innovative blended finance deals.

Recently, Convergence provided grant funding to impact investor NatureVest to develop the blue bond market. Link

Convergence is chaired by Walt Macnee, Vice Chairman, MasterCard Worldwide.