Key Facts

1.    What is CDC?

CDC is a Development Finance Institution (DFI), owned by the UK Government’s Department for International Development. Our mission is to foster growth in sustainable businesses, helping to raise living standards in developing countries.

CDC is not designed to solve all development challenges; it is one part of the UK Government’s armoury to combat poverty.

2.    How does CDC contribute to poverty reduction?

a) CDC invests in the creation and growth of viable private businesses in poorer developing countries to contribute to the economic growth that is central to cutting poverty; and

b) CDC mobilises other private investment in these markets both directly, and by demonstrating a profitable and responsible track record. CDC does this because many commercial investors still shy away from the emerging markets in sub-Saharan Africa, parts of South Asia and other poor countries which are seen as risky, unknown and problematic.

3.    CDC’s investments and their impact:

At the end of 2008 CDC’s portfolio of companies was worth £928m.

• CDC is not a direct investor, but places its capital in 127 investment funds managed by 59 fund managers at year end 2008.
• These funds now back over 700 portfolio companies in 74 different countries.
• CDC portfolio companies employ over a million people and support the lives of millions more.
• These companies pay over £1 billion a year in taxes to local governments.

In 2008 CDC invested a record amount of £436m, with £194m going into African businesses and £230m supporting businesses in Asia.

By supporting locally-based fund managers, many of them operating first-time funds, CDC has supported the development of a new, private investment infrastructure in many poor countries. A decade ago Africa had only a handful of private equity fund managers, now it has over 50.

For more information on CDC’s development, financial and economic impact, go to Chapter 4 of the Growth for Development report.

4. How has CDC performed since its 2004 reorganisation?

• CDC’S value has increased from £1bn (end 2003) to £2.3bn (end 2008). During this period, realised investments (companies sold from the portfolio) have returned £2.5bn to CDC for future reinvestment in new businesses.
• In the same period £2.7bn was committed to funds for investment in the poorer countries of Africa, Asia and Latin America.
• Between 2004-08, 74% of CDC’s new investments were in the poorer developing countries and 64% in sub-Saharan Africa or South Asia.
• Over US$21 billion of third party investment was attracted alongside CDC’s capital
• CDC is entirely self-financing and has received no money from the UK taxpayer since 1995.

5.    What is the focus of CDC’s investment?

• CDC’s new investment policy for 2009-13 means that of all our new investments:

a) 75% must be based in low income countries;
b) 50% must be in sub-Saharan Africa; and
c) Up to £125 million can be invested in SME funds in other developing countries.

• 50% of CDC’s capital is invested in sub-Saharan Africa, a larger proportion than any other development finance institution (DFI). CDC also has the one of the largest portfolio of SME investments of any bilateral DFI.
• CDC’s investments are spread across all sectors and include companies of all sizes. Local investment decisions by CDC’s fund managers deploy CDC’s capital where there are opportunities for successful investment. CDC invests in this way because it knows that long-term, sustainable economic growth in poor countries depends upon them having broad-based, mixed economies.

6. CDC’s revised Investment Code – ‘how’ it invests – is world class

• Across their portfolios, CDC’s fund managers are helping companies build value by improving their environmental management, labour conditions, health and safety standards and corporate governance.
• CDC’s Investment Code reflects and builds upon the World Bank IFC’s ‘best practice principles’. Our Code is available here.
• CDC invests in some difficult environments so standards within businesses are not always perfect. But CDC insists on improved reporting by its fund managers and investee companies so that problems are identified and fixed as soon as is practicable.