CDC posts £223m return in 2012

The UK development finance institution, which made £169m worth of new commitments last year, has recently established a presence in the direct equity and debt investment realms.

CDC Group, the UK government’s development arm, today unveiled annual results that painted a positive year for the institution. 

The group recorded a £223 million (€265 million, $345 million) total return for 2012, representing a return on capital of 9 percent over the year and 6 percent over three years. This was in stark contrast with the subdued 2011, for which the institution posted a £72 million loss.

The year was also good on the investment front, with CDC providing £397 million worth of capital to businesses last year – an increase of 33 percent on 2011. Africa represented the lion’s share of these investments: 43 percent of capital deployed by CDC targeted companies based on the continent. 

By making new commitments and showing a positive return, CDC demonstrates to other investors that it is possible to invest successfully in some of the harder places in the world

Diana Noble

This was topped by the nine new investment commitments, totalling £169 million, made by the group last year. Seven of them were directed towards investment funds, while the other two were the first commitments made by CDC’s Equity Investment and Debt and Structured Finance teams, two divisions the institution inaugurated last year. 

Its equity team provided a $32.5 million of quasi-equity loan to Export Trading Group in November, as part of a $210 million transaction that saw The Carlyle Group, Standard Chartered and South Africa-based Pembani Remgro Infrastructure Fund acquire a minority stake in the African agribusiness company. 

CDC’s debt arm also committed $30 million to Investec’s Africa Credit Opportunities Fund I, sub-Saharan Africa’s first corporate debt fund. 

“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,” commented Diana Noble, chief executive of CDC, in a statement. 

The total number of businesses supported by CDC rose from 1,126 in 2011 to 1,250 last year, allowing the number of jobs provided for by these companies, at 1,109,000, to pass the one million mark for the first time in the institution’s history. 

CDC’s net assets, worth around £1 billion in 2004, are now valued at £2.8 billion.