The UK’s development finance organisation CDC Group PLC (www.cdcgroup.com) says that 2009 marked the start of CDC’s new, 5-year investment policy which will see it make at least 75% of new investments in low income countries (average Gross National Income per capital of less than $905) and 50% in sub-Saharan Africa.
On 20 April it announced results for the latest calendar year, and reported it with made a return of £207 million ($299 mln) and invested £359m in businesses in developing countries.
CDC is a fund of funds with net assets of £2.5 billon ($3.6 bln), owned by the UK government. It uses its own balance sheet to invest in private equity funds focused on the emerging markets of South Asia and sub-Saharan Africa. By the end of 2009, its capital had been invested in 794 companies located in 71 countries. These companies directly employ at least 750,000 people and pay local taxes of more than US$3bn a year.
Activities for the year in Africa include:
• Invested £219m in businesses, making it the biggest private equity investor in sub- Saharan Africa;
• Grew the value of its portfolio of African businesses to £731m;
• Made £142m of commitments to new funds; and
• Backed 5 new Africa-focused funds, including the first ever private equity fund in Sierra
Richard Laing, Chief Executive of CDC, said: “These are positive results which show that, despite the tough conditions caused by the global downturn, the companies in which CDC has a stake are performing well. We are now invested in 134 funds with 65 fund managers, with over £1.5 billion of commitments still available to be drawn down by these funds for new investments in the world’s developing economies. Our profits will be recycled into these new investments.”
CDC has a 60-year history of putting capital to work in the world’s poorest countries, often in challenging environments.
CDC’s mission is to foster growth in sustainable businesses thereby helping to raise living standards in developing countries. It does this by providing capital for investment in sustainable and responsibly managed private sector businesses.
According to Mr Laing: “CDC’s activities make a real difference. During the last five years we have invested over £1.5 billion and our capital now backs nearly 800 sustainable private sector businesses. These support the lives of over 3 million people and pay at least $3 billion of taxes each year to their own governments. This powerfully demonstrates the strong developmental effect of the private sector improving people’s lives in the poorest countries of the world.”