Figures released today show that CDC Group plc (CDC), the UK’s development finance institution, increased the level of its investment in developing countries to GBP420m for the year. The UK government-owned investor also made a return of GBP269m in 2010.
By increasing both the level of investment and returns on its 2009 figures, CDC has also played an important role in demonstrating to other investors the potential of the private sector in sub-Saharan Africa and South Asia.
The company, which is the biggest private equity investor in sub-Saharan Africa, now provides investment to 930 businesses in 70 countries. These businesses employ over 800,000 people and pay local taxes of more than USD3.1bn, playing a key role in supporting economic growth in poor countries.
During 2010, CDC made a GBP269m total return, which led to a rise in the company’s value to GBP2.8bn – from a level of GBP1bn following CDC’s restructuring in 2004. CDC also invested GBP420m in developing countries – with the last 5 years seeing 44% of new investments in Africa and 48% in Asia, and generated GBP237m of cash from its portfolio for future re-investment in developing countries. In addition, CDC mobilised USD1,378m of additional third party capital; and secured an 18% return on its portfolio.
Richard Laing (pictured), CDC’s Chief Executive, says: “There were encouraging signs in 2010 that the economies of Africa and Asia are attracting more investment but there still exists a desperate shortage of commercial capital for promising businesses in the world’s poorest countries.
“CDC’s performance in 2010 is something the UK can be proud of. And while our money alone is not enough, I am confident that CDC’s financial success will demonstrate to other investors that Africa and South Asia are places where it is possible to invest responsibly and in a commercially successful way.
“CDC has demonstrated its success as self-sustaining engine for development impact in the poorest countries in the world. We now provide investment to 930 businesses in 70 countries and these companies directly employ over 800,000 people and pay local taxes of more than USD3.1bn a year.”