Catalytic Capital

Capital that is designed to overcome specific, well-defined financial risks or other barriers that prevent investors from directing conventional capital – with terms that are representative of the asset class – toward impactful projects or companies. 

Often unusually patient, risk-tolerant, concessionary, and/or flexible, catalytic capital provides a missing piece of financing that prompts conventional investors to shift from “no” to “yes” in supporting impactful investments, either immediately or over time as the investment is de-risked or perceived as de-risked. At Prime, catalytic capital can be a grant or an impact investment, but some investors exclude grants from their definition. 

Resources

• Why Impact Investing Needs Philanthropy and Catalytic Capital

• MacArthur Foundation’s Catalytic Capital Resources & Programs

• Tideline’s “Catalytic Capital: Unlocking More Investment and Impact”

• Impact Alpha’s Catalytic Capital News Beat

• EDF and Climate and Forest Capital’s “Catalytic Capital and Agriculture: Opportunities to Invest in Healthy Soils, Resilient Farms and a Stable Climate”