Each year, commentators seem to delight in questioning the relevance of the World Economic Forum’s AGM, or Davos, to use its shorthand. But still they come – world leaders, key opinion-formers, policymakers, financiers, and philanthropists, gathering together in the snow in an effort to advance critical issues like impact finance. A case in point this year was the session bringing together those of us behind the SDG Impact Finance Initiative (SIFI) with current and potential backers.

What is SIFI?

An international initiative, designed in Switzerland, SIFI’s aim is to mobilise catalytic capital to unlock private investment targeted at sustainable development in emerging markets and developing economies. It was launched in 2022 by a coalition that included Switzerland's State Secretariat for Economic Affairs, the Swiss Agency for Development and Cooperation, and the UBS Optimus Foundation. This collaborative approach embodies a key UBS principle – partnership.

SIFI’s goal is to unlock CHF 1 billion in private capital for impact in emerging markets. What distinguishes it is its ability to pool public and philanthropic capital in ways that directly tackle the barriers that typically hold back impact investing.

The approach starts with donations that are topped up by contributions from other funders. In SIFI’s case one US dollar of donor seed capital is typically matched by contributions from other donors. Then, by using that capital catalytically, e.g. by committing to take the first loss on investments if needed, SIFI has been able to attract a further six to seven US dollars from private investors (2024). Together, these mechanisms help create clear pathways for promising initiatives to become investment-ready and ultimately scale more effectively.

In addition to reducing risk, SIFI also helps enhance credibility. Its involvement provides a signal to the market that a vehicle or fund has successfully navigated a rigorous due diligence process.

More than raising money

Raising capital is just the start. New models and initiatives need different types of support at different stages of maturity. SIFI frames its investments according to two distinct phases or “windows”, alongside by a third “ecosystem” window:

  1. Innovation window, where grants are used to establish proof-of-concept or support expansion of promising vehicles;
  2. Investment window, where a blend of philanthropic and risk-tolerant, concessional private capital is used to achieve growth and scale;
  3. Ecosystem phase, where SIFI commissions policy research along with tools and framework development and then gathers and shares learnings with the market.

Tackling persistent challenges

While the approach is clear, execution isn’t always easy. We shouldn’t shy away from the fact that the impact finance community faces structural challenges around how we design financial solutions, reduce risk for institutional investors, and bridge the gap between innovative ideas and transformational impact using blended finance. These include:

  • The limited and fragmented supply of catalytic capital: Development agencies and Development Finance Institutions are often reluctant to provide ‘first loss’ capital, i.e., the capital that would absorb losses if they’re incurred. Generally, they’d rather take the less risky portion of the investment.
  • Many stakeholders are legally restricted from contributing higher-risk capital which would leave them exposed to losses.
  • Misperception of risk: High perceived risk continues to deter private investors, slowing the flow of capital into impactful opportunities.

Where does SIFI fit into this picture?

SIFI’s portfolio shows that catalytic capital can nurture new models while strengthening proven ones. Investments in initiatives such as Chancen International, which uses income share agreements to address education gaps in Kenya, or Mirova, a nature capital fund investing in regenerative agriculture, reflect an intentional strategy: support strong teams, partners, and models while providing funding for novel approaches. Indeed, the UBS Optimus Foundation has also provided funding to Chancen International.

SIFI seeks to achieve that holy grail of impact, systems change, by helping to shape market practices and assembling broad commitment to scaling capital for impact. It’s actively building a diverse and inclusive coalition of philanthropic institutions, financial actors, and partner governments from around the world. Alongside Switzerland, those governmental backers now include Luxembourg and South Korea.

Maintaining momentum

The next wave of progress will come from solving the practical issues that slow down undertakings. That means:

  • New funding models
    • Introducing convertible and repayable grants is helping SIFI move beyond traditional grant dependence. Convertible grants provide early-stage projects with funding that starts as a grant but can convert into equity or another financial instrument once the project proves its viability. This helps SIFI support experimentation while retaining the possibility of a financial return that can be recycled into new initiatives. Repayable grants, on the other hand, offer funding that is only reimbursed if the project succeeds, reducing pressure on early innovators while encouraging disciplined financial planning.
  • Integration across investment windows
    • Shifting from pilot to growth phase isn’t easy. Stronger links between the three investment windows outlined above can help pilots scale into self-sustaining, commercially viable operations. For instance, where Window 3, the market-building "ecosystem" window, was once approached in isolation, the learnings from over 20 SIFI projects can now be shared with initiatives in Windows 1 and 2 (Innovation and Investment) in the form of market intelligence. These insights range from what financial structures work best in emerging markets, to how projects are navigating challenges like currency and cashflow risk. As a result, early-stage projects benefit from a clearer pathway: Window 1 can focus on experimentation, Window 2 supports those with stronger fundamentals, and Window 3 reinforces both by feeding learnings back into the system.

Looking ahead

Looking forward, there’s no doubt that much remains to be done, but we’re optimistic. Once again, this year’s WEF showed its ability to bring a wide range of stakeholders together to tackle the tough problems.

We’re focused on expanding our work with all partners in the impact finance space, including collaborations such as SIFI, but increasingly, family offices. As our 2026 Trends in Philanthropy publication highlights, we’re now seeing many family offices deploy both return-seeking and impact-seeking capital as families take a more holistic view of their wealth. And it’s that connection between these different forms of capital, deployed in alignment with families’ impact and financial priorities, that makes them more than just the sum of their parts.

Our own UBS Optimus Foundation plays a similarly critical role by providing the structure, expertise, network, and due diligence rigor needed to turn intent into measurable outcomes. It’s also helping families and individuals gain access to our network of trusted partners, like SIFI.

Just as each year brings new challenges, it also brings new tools and new drive to meet them. The powerful combination of discipline, transparency, and innovation, all of which are embodied by SIFI and the UBS Optimus Foundation, is helping ensure those tools are not just imagined, but funded, realized, and deployed.

UBS OF disclaimer:

The UBS Optimus Foundation is a global network of separately organized and regulated, tax-exempt, charitable organizations, founded and managed by UBS, that make grants and other financial contributions to implementing partner organizations aligned with their values and objectives.

Please read our thought leadership disclaimer.