Bad information is blocking billions in development finance

What if the biggest obstacle to channeling billions of dollars in private finance into global development isn’t investor reluctance, but rather a broken information ecosystem? That was the diagnosis from Manfred Schepers, CEO of the ILX Fund, speaking at Casa Devex on the sidelines of the Fourth International Conference on Financing for Development in Sevilla, Spain, this week. ILX Fund is an asset manager that invests for impact in the United Nations Sustainable Development Goals and climate-focused private debt in emerging markets. “Investment is about data. It’s not about belief,” Schepers said, pointing to a systemic gap in both the availability and comparability of financial risk and return data from development finance and private markets. Without fixing this, he argued, the trillions in global pension and sovereign wealth funds will remain disconnected from development priorities. ILX Fund, which co-invests with multilateral development banks on behalf of European pension funds, has seen its own portfolio grow from $1 billion to $1.7 billion in three years of operation. Its pitch: development finance, particularly private-sector projects backed by multilateral development banks, offers stable risk-adjusted returns — if investors can see the numbers. That will require prying open the “obscurity of finance” on Wall Street. “If it’s related to Addis Ababa and Paris,” he said, referring to landmark global development summits, “that data needs to become a public good.” Schepers also called out financial firms' fee structures and cultural resistance to stable, impact-focused investments. “If you don’t change,” he warned, “you disappear.” He predicted that even a 1% allocation from global pensions and sovereign wealth funds could unleash $700 billion for development — not a pipe dream, he insisted, but a “massive impact” within reach, if the information plumbing is finally fixed.