The UK’s Department for International Development (DFID) is developing new ways to foster the market for impact investment in Africa and South Asia. In late 2012, DFID launched a new £75M impact investment Fund of Funds (The DFID Impact Fund), which is managed by CDC. At the time, CDC issued a request for proposals from fund managers, holding companies, non-profit organisations and other investment vehicles for investment from the new fund.
CDC is today issuing a second request for proposals (RFP).
CDC’s Head of Impact Investments, Gurmeet Kaur said:
“The first stage of our request for proposals was hugely encouraging. We received over 120 applications, several of which have undergone further detailed discussions with the CDC team. Earlier this year, DFID Impact Fund made its first commitment to invest $15M in Novastar Ventures to develop and grow early-stage businesses that bring the most basic human needs to some of the poorest communities in East Africa. By opening a second RFP, we want to tap into the expertise and skills of a market that has evolved significantly in the course of the last year, with both new entrants and new ideas.”
The DFID Impact Fund will invest in impact investment intermediaries providing capital to businesses and projects improving the lives of poor people in sub-Saharan Africa and South Asia. Backed by expert technical assistance, the DFID Impact Fund is designed to attract new investors to promising impact investment intermediaries.
The DFID Impact Fund operates under different principles to CDC’s usual investment approach. Typically, under its current strategy, CDC’s focus is on investments that provide both reasonable commercial returns and the opportunity to grow businesses and create jobs and the environment for jobs. The DFID Impact Fund, however, is investing on an impact-first basis, whereby the investments will be focused on backing businesses that achieve positive impact specifically on the poorer sections of the population, either as consumers, producers or workers. Unlike CDC’s usual investments, the DFID Impact Fund has no set target for returns, but will at least expect to have its capital returned upon exit. Requirements set out in this request for proposals only apply to investments sought for application of the DFID Impact Fund.
CDC is accepting proposals on an open-ended basis until 31st December, 2015. All proposals should be sent to: ImpactFundresponse@cdcgroup.com