CDC Group, the UK government-owned development finance institution, will receive £735 million ($1.1 billion; €1.1 billion) of new capital from its shareholder the Department for International Development over the next three years. The capital will be used to fund investments across asset classes, according to a spokesperson.
“We are looking to invest up to $1 billion a year. Last year we invested about $460 million which was a relatively low level,” the spokesperson said.
Investments made by the group in 2014 were split 30 percent into funds, 30 percent into equity, 30 percent into debt and a bit of trade finance, he said.
It has been preparing for the new capital for more than a year, the spokesperson said. CDC anticipates demand for its capital to be more than £640 million in 2015, according to a DFID statement.
In 2012, CDC changed its strategy away from focusing on funds of funds and reduced the geographical spread of new investments to just Africa and South Asia. The group invests off its own balance sheet in these regions in sectors that support job creation. These investments include into private equity funds and direct investments alongside PE firms and other DFIs.
The new funds from DFID will be the first injection of capital into CDC for more than 20 years, DFID said. Since 1948 the UK government has invested £144 million into the organisation.
In January 2014, CDC invested alongside Actis and the International Finance Corporation in a mixed-use real estate development in Nairobi.
The development finance institution’s net assets stand at £3.4 billion, according to a CDC statement. It is currently invested in 1,300 companies in 74 countries.