UK Development Finance Institution Reports Annual Results Including Highest-Ever Level of Jobs and Businesses Supported
CDC Group plc (CDC), the UK’s development finance institution, has announced that the total number of businesses worldwide being supported by its capital rose from
1,126 in 2011 to 1,250 in 2012. The total jobs provided by these businesses rose from 976,000 to over 1,109,000, an increase of 14%.
This is the first time in CDC’s history that its capital has supported businesses providing over one million direct jobs. In 2012, CDC also invested £397m in businesses, an increase of £33m over 2011. 43% of those investments (totalling £171m) were invested in Africa.
CDC showed a total return for 2012 of £223m, driven in part by the rise in global markets. This represents a return on capital for CDC’s shareholder, the UK Government, of 9% for the year and 6% over three years. Continued successful financial performance allows CDC to remain a self- funding organisation, as it has been since 1995.
As well as publishing a new strategy with a mission to focus on building businesses to create jobs in Africa and South Asia, CDC also made nine new investment commitments totalling £169m. Seven commitments were made to investment funds, while new CDC investment teams – Equity Investments and Debt and Structured Finance – also made their first investments.
The first investment made by CDC’s new Equity Investments team was made in November 2012 when CDC provided US$32.5m to the founders of Export Trading Group (ETG). ETG is an African agribusiness with operations in crop buying, warehousing, distribution and merchandising that employs over 7,000 people and reaches hundreds of thousands of small-scale farmers.
CDC’s new Debt and Structured Finance team made a US$30m commitment to the Investec Africa Credit Opportunities Fund I, sub-Saharan Africa’s first corporate debt fund. It plans to provide expansion or working capital to businesses and projects which already support local employment, giving companies access to longer term funding than is typically available in the market.
Commenting on CDC’s results, CDC Chief Executive Diana Noble said:
“CDC’s new strategy is focused on making investments to grow businesses and create jobs. By making new commitments and showing a positive return, CDC also demonstrates to other investors that it is possible to invest successfully in some of the harder places in the world where the private sector is weak and jobs are scarce.
“Not only do the 1,250 businesses that are supported by CDC’s capital provide over one million direct jobs, but they also contribute £2.6bn in taxes to their local exchequers. In 2013, we will build on these achievements as the high calibre team that has been assembled at CDC continues to direct capital to opportunities with strong job creation potential, doing so at no cost to the taxpayer.”
Key facts
- During 2012, CDC invested £397m in businesses in developing countries.
- CDC’s 1250 underlying portfolio companies provide over 1,109,000 direct jobs and paid £2.6bn in local taxes.
o In Africa, CDC’s 580 underlying investee businesses employ 203,000 people and are valued at £1,001m; and
o In South Asia, CDC’s 321 underlying investee businesses employ 406,000 people and are valued at £492m. - CDC’s net assets are valued at £2.8bn – from a level of £1bn following CDC’s restructuring in 2004.
- During 2012 CDC made nine new investment commitments totalling £169m including:
o One investment by the Equity Investment team of US$ 32.5m into ETG;
o One commitment of US$30m by the Debt and Structured Finance team to the Investec Africa Credit Opportunities Fund I; and
o Six new fund commitments, including two to first time teams (US$15m to the SGI Ethiopia Growth and Transformation Fund and US$20m to the Phatisa Pan African Housing Fund). - CDC has received no new capital from government since 1995. To watch case studies of CDC’s investments, please visit:
o www.youtube.com/CDCGroupUK
