The concept of blended finance has long been seen as a promising solution for addressing global and societal challenges by mobilizing capital. However, its adoption has faced obstacles due to insufficient understanding and lack of standardization. Each new structure is often built from scratch, complicating the process. Recently, two organizations have introduced five archetypes of blended finance vehicles to streamline this complexity. These archetypes break down structures, identify relevant investor types, outline priority distributions, and highlight potential variations. This collaborative effort between British International Investment and BCG aims to provide practical guidance for fund managers and investors, enabling more efficient design and evaluation of blended finance vehicles.

Through an analysis of 65 recently launched blended finance funds, these organizations identified distinct categories such as "Pioneering Impact Equity" and "High-Yield Mobilisation." The report emphasizes that while these archetypes aren't rigid templates, they serve as valuable references for designing and assessing blended finance structures. By categorizing funds into specific types, the report seeks to enhance clarity and efficiency in the field.

In addition to the archetypes, the report includes a scorecard designed to help limited partners (LPs) and general partners (GPs) evaluate whether a blended finance vehicle's structure aligns with its objectives and effectively balances stakeholder priorities. This tool provides a framework for ensuring that financial vehicles are both purpose-driven and equitable.

The collaboration between British International Investment and BCG marks a significant step forward in simplifying blended finance. By offering clear guidelines and practical tools, the report paves the way for more effective capital mobilization. As the world continues to face pressing challenges, the ability to efficiently structure and evaluate blended finance vehicles becomes increasingly crucial. With these archetypes and the accompanying scorecard, stakeholders can now approach blended finance with greater confidence and precision, ultimately enhancing its impact on global issues.