CDC

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CDC is the world’s oldest development finance institution and has a proud heritage in supporting the building of successful businesses across poor and emerging markets.  Having had a focused strategy over the past 8 years as an investor (LP) in private equity funds (GPs) in emerging markets, it is going through an exciting transformation that will extend the range of its activities to include direct equity investing and direct lending alongside its fund selection business.  The mission of CDC is to:-

To support the building of businesses and creation of jobs in the world’s poorest countries across Africa and South Asia, making a lasting difference to people’s lives.

CDC takes a wholly commercial approach to its investing and lending activities, but, as a DFI, is ultimately motivated by the development impact of its investing activities. As it invests from its own balance sheet, it has considerable flexibility in how it structures investments and in the risk – return profiles it can consider.   It is also able to take a longer view – up to and beyond 10 years if that is necessary.

CDC is wholly owned by the UK government’s Department for International Development (DFID) and plays a key role in DFID’s strategy to help build a thriving private sector in the developing world.  It is a measure of CDC’s high quality investment processes that despite investing in regions of the world that are typically considered very high risk,  it has received no fresh investment from government since 1995 and has returned a profit (which has been reinvested) of £1.8bn since 2004. 

CDC invests in a number of ways:

- placing capital with expert fund managers (GPs) who then use their local knowledge and expertise to find promising businesses in which to invest;

- making direct investments or co-investing in specific businesses, alongside local GPs or like-minded investors; and

- making loans, guarantees and offering micro-finance support