Introducing Matrix Capital
In the next decade, $3.1 trillion worth of investment will need to be found to bolster growth rates and development in emerging markets and ensure that developed states do not succumb to secular stagnation. However, governments have allocated only $1.9 trillion globally. To fill this $1.2 trillion gap, other sources of funding must be incorporated into infrastructural and developmental projects worldwide. Development projects require a Matrix of capital options across their lifecycle—not just governmental investment.
Although non-governmental foundations and private sector investors want to play a role alongside governments in this global investment push, their track records working together are poor. These three actors’ divergent priorities, concerns, and perspectives usually lead to inferior investments, lost opportunities, and bad performances. These unsuccessful outcomes are not demonstrative of a bad premise, but simply bad execution.
Every investment—whether it is building much-needed roads in South Sudan or improving the entrepreneurial environment in Argentina—requires a balance between the various types of capital over the timeline of a project. While a government, responding to public demands, may provide the initial funding and direction for an investment, it often requires foundational support to bolster its expertise to ensure equitable, societal results and private sector capital to expand the project and ensure its self-sufficiency over the long-term. The involvement of governmental, foundational, and investor capital is the ‘full stack’ of capital sources.
Balancing the needs of these actors requires understanding their priorities, concerns, and, often more importantly, their perspectives. Coming from vastly different backgrounds and environments, each actor speaks a different language. Office:FMA, given our diverse, interdisciplinary, and substantial background working with each actor, has a proven track record acting as a successful ‘Rosetta Stone’ putting together a ‘full stack’ of capital options for myriad projects globally.
If developed, emerging, and frontier markets are to bolster private sector growth, improve societal welfare, and respond to climate change and other transnational currents; they must commit themselves to the full Matrix of capital sources.