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The first failure mode of single-cycle instruments serving multi-cycle objectives: the objective's long horizon collapses onto the instrument's short one. Concessional capital placed in a first-loss position is consumed at resolution rather than recycled, because the instrument has no second cycle to persist into.
Each blended-finance fund re-opens its concessional case from scratch — raising a fresh first-loss layer — because the prior fund's concessional capital was extinguished at resolution rather than carried forward as a recyclable base.
WBF Section 3