WEBVTT

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So our role is really, first,
to be kind of the connection between our

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investor, our clients,
the philanthropic world,

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and the government, government agencies,
foundation,

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DFI will also have their own objective as
investor,

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and also the research academic world,
and to bring that all together.

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Laura, thank you so much for being here.

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What are some of the biggest challenges
in blended finance,

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and what lessons have you learned?

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Thank you very much for having me today.

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Well,
blended finance is an absolutely

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important topic for investor,
but it's true that they are very often

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deferred to investing into blended
finance for various reasons.

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Long-term payback in blended finance fund
tend to be over a ten-year period.

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Lack of liquidity in this investment
vehicle, also uncertain return,

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could be an issue and a challenge for
them,

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as well as a really identifying the key
impact metrics thereafter could be

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another complex issue.

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And really understanding how blended
finance work, how the waterfall,

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the structure,
and the catalytic concession tranches

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work, could be another challenge.

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And this is where we need to spend a lot
of time educating our client.

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And looking at the role of asset managers
and the role that they play,

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what can they do to really manage
investor expectations?

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So our role is really, first,
to be kind of the connection between our

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investor, our clients,
the philanthropic world,

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and the government, government agencies,
foundation,

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DFI will also have their own objective as
investor,

61c4cc43-6c28-441d-977c-228d0812c7b0-4
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and also the research academic world,
and to bring that all together to create

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this type of vehicle that work for our
investor.

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That would be I think our key role in
that.

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So we spoke about the challenges,
what are some more solutions?

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So our key role as an asset manager is to
educate our client and to share on

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lessons learned from past strategy and
past product around blended finance.

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One of the key lesson learn and key
solution that we believe is needed to

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scale blended finance is to calibrate the
concessional tranches,

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the junior tranches,
which is absolutely critical.

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In the past,
some blended finance fund have been using

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these junior tranches at a large extent.

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What we would recommend and what we've
learned is that this need doesn't need to

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be 50% of the fund,
but rather to keep it low—15,

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20%—and use the full potential of the
catalytic tranches to leverage and bring

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private investor—capital—into the fund.

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That would be one key aspect.

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I think another one that is very
important is the partnership with

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research and the academic world.

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We need to have more metrics around
what's the return of a blended finance

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fund, what's the default rate,
what are the impact metrics so that we

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can really prove to investor that this
mechanism work and that they're really

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protected and that the risk of default
and the risk they are exposed to and the

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risk that they perceive is actually very
low.

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And that blended finance is actually very
effective and very efficient.

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And so the third element that was really
helpful to us is achieving

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investment-grade rating for the senior
tranches.

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And so usually there is challenges from
rating agencies to get those deal rating

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and to achieving an investment-grade
rating for the senior trenches can really

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help the investor.

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And the fourth element is working closely
with government agencies and DFI on their

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requirement to make sure we can scale
blended finance and that the fund is not

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too narrow in its focus.

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And what I mean by that is being—having a
global fund,

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being exposed to various industries,
fixed versus floating rate,

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being exposed to local currency as well
versus US

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dollar currency, and so on.

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Thank you so much.

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Thank you very much for having me today.