ARTICLE 01 · INTRODUCTION · PUBLISHED
Is Catalytic Finance a Skill, or Are We Just Measuring Luck? ↗
The investment management analogy, the core hypothesis, and early findings from the model.
A Sharpe ratio lens for catalytic finance
Beyond leverage.
Measuring catalytic alpha.
Can climate funds, development institutions, and philanthropic investors consistently mobilize more additional private capital than expected, given the resources and risks they commit?
An independent research project · Model first, data second
Same metric. Different story.Hypothetical example
Institution A3.0×
Reported mobilization · Comparable benchmark: 1.5×
Above benchmark despite the lower reported ratio
Institution B8.0×
Reported mobilization · Comparable benchmark: 10.0×
Below benchmark despite the higher reported ratio
This simplified example shows why relative performance matters. It is not a Catalytic Alpha calculation and does not yet account for additionality or economic cost.
The research
Is catalytic performance an institutional capability, or just luck?
Reported private capital mobilization shows how much funding participates in a transaction. Catalytic Alpha asks a harder question: did the institution cause more investment than a comparable intervention should reasonably have achieved?
Additionality
How much private capital would not have been invested without the catalytic intervention?
Economic resources
What did the institution actually spend, put at risk, or tie up over time?
Risk and difficulty
What outcome was reasonable to expect in that market and transaction?
Persistent performance
Does an organization repeatedly outperform comparable peers, or did it get lucky?
Current research position: A single universal score has not been established. Separate measures of economic cost and capital capacity may prove more defensible. No institution has been ranked or shown to possess persistent catalytic skill.
Research prototype, not a validated impact estimate. The results show what could happen under your assumptions. They are not proof that public support will cause investment.
Transaction assumptions Editable
Enter all amounts in millions, using the same currency. The starting numbers are examples, not real transactions.
Your estimated results
We test 1,000 possible outcomes from the ranges you entered. These results depend on your assumptions.
Mean additional financing
With-support financing minus each simulated without-support amount, averaged across the 1,000 scenarios. This is projected additional financing, not a causal effect proven by a study.
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Model 95% range: —
Additional financing per unit of public cost
The mean additional financing divided by mean public economic cost. Uses your cost estimates. It does not compare institutional skill or prove private investment was caused.
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Ratio of means, not mean of ratios
Simulated ratio median
The middle value of 1,000 scenario ratios. It can differ from the ratio of averages, especially when the assumed public cost varies widely.
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Model 95% range: —
Chance of clearing your threshold
The share of the simulated outcomes above your chosen threshold. It is a model scenario frequency, NOT a statistical confidence statement or verified chance of success.
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Under your assumptions only
Distribution of additional financing / public cost
The distribution may be skewed or include negative ratios. A normal bell curve is not imposed.
Public contingent capacity — (not a cost estimate)
This box copies the facility amount you enter on the left. An $8 million guarantee means up to $8 million nominal exposure, not $8 million spent. The calculator cannot infer the guarantee subsidy or loss distribution from its face amount.
Private risk retained Not estimated: requires loss-sharing terms
Not calculated in this version. To estimate it, we need the signed deal terms: how much private investors commit, which tranche they own, protection coverage, who absorbs the first losses, triggers, recoveries and any other guarantees. Nominal uncovered principal could then be shown separately from expected private losses.
Public economic capital at risk Not estimated: requires calibrated loss data
Not calculated in this version. A risk-capital estimate needs a defined horizon and confidence level plus a calibrated distribution of losses, recoveries, collateral, drawdowns and correlated exposures. This is different from both maximum contingent capacity and expected public economic cost.
Evidence classification Assumption driven forecast (unverified inputs)
Assumption driven forecast means the financing without support and public cost ranges have been supplied as estimates. This tool does not verify source documents or infer a causal counterfactual. To classify a case as independently supported, we would need a source and review process that is not yet built into this version.
This tool makes conditional forecasts. It cannot independently identify causal additionality, public economic cost, or the risk-adjusted skill of a financing institution.
Reading your results
What these numbers mean
01
Additional financing is estimated financing with public support minus financing without it. A negative result is possible.
02
Cost efficiency compares estimated additional financing with the economic cost of support. Optimistic assumptions can make it look higher.
03
The 95% range shows variation across your scenarios. It is not a statistical confidence interval or proof of causal impact.
What would make this decision ready?
Evidence needed before a real financing decision
Use the calculator to test an idea, then check these assumptions against actual documents and investor behavior.
- Verified private financing commitments and their conditions.
- A credible description of financing without public support, preferably supported by declined offers or comparable cases.
- Public economic cost measured using the appropriate instrument, including expected loss, fees, recovery and opportunity cost without double counting.
- Contractual allocation of risk between public and private investors.
- Independent review and later comparison with realized financing and investment outcomes.
All calculations run in your browser. Nothing entered here is sent to a server. CSV downloads stay on your device.
Research foundations: OECD blended finance guidance (2025) · IFC blended finance principles. This calculator is a research prototype, not an OECD or IFC endorsed tool.
The search for Catalytic Alpha
Four articles following the research
A public research journal, not a product launch. The series explains the questions, the experiments, what has been learned, and what remains unresolved. Explore the article summaries below. The first article is now published on LinkedIn.
ARTICLE 02 · ADDITIONALITY
We Mobilized $100 Million. But How Much Did We Actually Cause?
The counterfactual problem: investment that occurred versus investment caused by an intervention.
Read planned synopsis
ARTICLE 03 · ECONOMICS
Why a $10 Million Grant Is Not the Same as a $10 Million Guarantee
Economic cost, capital capacity, and transaction difficulty across different instruments.
Read planned synopsis
ARTICLE 04 · CAPABILITY
If Catalytic Skill Exists, Can We Measure It and Teach It?
Repeatable institutional performance, skill versus luck, and what might explain genuine capability.
Read planned synopsis
About the project
Not another leverage ratio.
Catalytic Alpha is an experimental effort to identify whether some organizations consistently cause more genuinely additional private investment than expected, considering market conditions, economic resources, deal selection, and chance.
Research proceeds from theoretical models to transaction data and testing. The hypothesis is falsifiable: apparent institutional differences may disappear once the relevant factors are controlled for.
“The aim is not to reward whoever reports the most private capital. It is to learn whether some institutions mobilize it better than we should reasonably expect, and why.”
Who is behind the research
About the researcher
Adam Bornstein
Volunteer, Catalytic Alpha
Adam is an investment and development finance professional with more than 25 years of experience across private equity, climate finance, and philanthropic capital.
He previously led financial analysis and innovation at a global climate fund, served on its Climate Investment Committee, and led a review of the Fund’s financing instruments. His experience also includes managing private equity investments and helping build philanthropic financing platforms for industrial decarbonization.
Catalytic Alpha grew out of an interest in applying ideas from investment management to how climate funds, development institutions, and philanthropic investors measure their ability to mobilize private capital.
Catalytic Alpha is an independent research initiative developed by Adam Bornstein. It is not affiliated with, sponsored by, or endorsed by any of his current or former employers or organizations with which he has worked. The research draws on publicly available information, financial theory, and hypothetical models to explore how catalytic performance might be measured and compared across institutions. All views, interpretations, and conclusions are Adam's own. Nothing published through Catalytic Alpha is intended to criticize, disparage, or make judgments about the performance, management, staff, or investment decisions of any particular institution. References to organizations, financial instruments, or transactions are made solely for research and educational purposes and should not be interpreted as institutional assessments or endorsements. The research remains experimental. Its methods, assumptions, and findings are subject to revision as the work progresses.