A recently published Harvard Business School Working Paper evaluating CDC’s impact as a fund investor between 2004 and 2012 concludes that CDC exceeded its investing benchmarks and successfully advanced its development goals.
Between 2004 and 2012, CDC pursued its development goals by investing in private equity funds. These funds invested in businesses in emerging markets, which had the potential to grow but needed capital or expertise to do so.
The evaluation was commissioned by CDC, on behalf of the Department of International Development, to understand the full impact of its fund investments over this period.
The evaluation analyses the impact of CDC’s fund investments on four measures of business success – employment, revenues, profits and taxes paid. It concludes that between 2008 and 2012, CDC’s portfolio businesses in emerging markets created a minimum of 345,000 direct jobs, as well as witnessing positive increases in revenues, profits and taxes paid.
According to the report’s findings, fund investing allowed CDC to reach a broader range of businesses, especially smaller businesses in a wider range of geographies, than it could have done on its own.
It also concludes that fund investing allowed CDC to build local capacity, especially through supporting first-time teams. Several of these funds have gone on to raise successor funds and create successful track records that have attracted commercial capital to emerging markets.