Founded in 1948, CDC has been investing in developing economies for over 60 years. During this time we have pursued an evolving strategy for a changing world, establishing and backing a number of sector-leading businesses around the world. Two dual objectives have remained constant throughout this period – the need to generate reasonable financial returns while achieving lasting development impact.
CDC does not interpret these two objectives as a trade-off where high potential impact negates the need for financial returns or vice versa. Instead we have minimum standards for each which must be met independent of the other. Every investment decision interrogates whether potential impact (particularly in the form of job creation) is sufficient and whether the potential return is adequate for the risk CDC’s capital is taking. Both criteria must be met for an investment to proceed
CDC sets a high store by being market-led in its approach to investing. We have developed processes and skills which we believe are well suited to meeting the real, rather than perceived, needs of businesses and funds across Africa and South Asia. They are characterised as follows.
When investing directly, CDC uses all investment instruments to achieve the financial return we need while tailoring the structure to the particular needs of the client. Investing through funds also remains a core strategy.Funds enable CDC to support a broaderrange of businesses, especially smaller,enable capacity building among local fund managers and mobilise third party capital.
We run highly commercial investment processes because successful, growing businesses also create impact. We also aim for our investments to make a lasting difference, and to demonstrate to othersthat it is possible to invest successfully in hard places.
Our timescales can be flexible and we can take a patient approach post-commitment, often with ten year-plus relationships with businesses or fund managers, because value creation and resultant impact in our markets often takes many years to fully materialise.
CDC is proud of its pioneering heritage, although risk is only accepted after diligence, mitigation where possible and the considered judgement of experienced investment professionals.
We recognise that investee businesses need assistance beyond capital, such as practical environmental, social or business integrity guidance and investment in human capital. As a responsible investor, helping companies achieve good standards of governance, along with strong environmental and social policies, is an important part of how we add value.
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Development impact and investment selection
Financial returns and investment selection