Friendly Partnerships

Blended Finance

Unlocking Private Capital in Underserved Real Estate Markets

Friendly Partnerships leverages blended finance as a structuring approach to mobilise private investment alongside public and philanthropic capital to address pressing social challenges in the UK, with a focus on reducing health inequalities through wellness housing for underserved communities. By aligning diverse investor objectives: financial returns, social impact, or both. We overcome barriers such as high perceived risk and inadequate returns, creating investable opportunities that deliver development impact aligned with the Sustainable Development Goals (SDGs), particularly SDG 3: Good Health and Well-being.

Giving a V.O.I.C.E for underserved communities

What is Blended Finance

Blended finance emerged in the early 2000s, formalized by the 2002 Monterrey Consensus and 2015 SDGs, to bridge funding gaps in developing countries, mobilizing $245 billion by 2022 through public-private partnerships like the GEF and Seychelles’ blue bonds, though it struggles to reach the poorest nations. In the UK, it can drive local growth, boosts jobs, supports underserved communities and aligns with UK social investment trends, unlocking 10% of placemaking investment capital, leveraging lessons from developing countries.

V - Value for Money

Friendly Partnerships ensures value for money by using catalytic public resources, such as long-lease public lands or first-loss capital, to de-risk investments, thereby attracting larger pools of private capital at a lower cost to taxpayers.

This blended approach maximizes the leverage ratio, potentially mobilizing £5-10 of private investment for every £1 of public or philanthropic contribution, optimising resource efficiency.

By targeting measurable outcomes like improved health and reduced housing costs, we deliver long-term savings to public budgets while achieving social good.

O - Outcome-Based Approach

We adopt an outcome-based approach because it aligns funding with tangible improvements in health inequalities, directly supporting SDG 3 by enhancing access to wellness-focused housing that promotes physical and mental well-being.

Our approach involves setting clear, measurable targets, such as reduced hospital admissions or improved mental health scores, and tying investor returns to these outcomes through tools like outcomes contracts or development impact bonds.

This ensures accountability and focuses resources on underserved communities, delivering sustainable health benefits over time.

I - Impact for Money

Friendly Partnerships achieves impact for money by integrating wellness housing solutions, combining affordable living spaces with health-focused amenities like green spaces and community care access, for underserved communities, ensuring every pound invested yields both financial returns and social value.

We use blended finance structures, such as subordinated debt or equity from public/philanthropic sources, to absorb initial risks, enabling private investors to fund scalable projects that improve quality of life.

By tracking metrics like health outcomes and housing stability, we demonstrate a high return on impact, justifying the investment with real-world benefits.

C - Collaborative Co-Creation

We foster collaboration by bringing together local authorities, private investors and community stakeholders to co-create wellness housing projects tailored to local needs, ensuring relevance and buy-in.

Through co-investment, local authorities contribute assets like public land, private investors provide capital for construction and operations, and Friendly Partnerships structures the deal to balance risk and reward.

This cooperative model builds trust, aligns objectives, and scales impact by pooling expertise and resources across sectors.

E - Education & Research

Friendly Partnerships educates government and local authorities on using blended finance at scale by offering workshops and case studies drawn from successful initiatives, like the Mayor of London’s Energy Efficiency Fund, adapted for housing and health contexts.

We aim to partner with research institutions, such as the Grantham Research Institute, to provide evidence-based insights on structuring effective blended finance vehicles, enhancing policymaker confidence.

This education empowers authorities to replicate our model, building capacity for sustainable investment in underserved communities nationwide.

The Friendly Characteristics

SDG Alignment: Transactions contribute to SDGs, particularly SDG 3
Positive Financial Return: The overall structure targets a positive return, with varying expectations (concessional to market-rate) across investors.
Catalytic Role: Public/philanthropic parties use tools like long-lease lands or first-loss funding to improve risk/return profiles, unlocking private sector participation.