UK government invites comment on CDC

The development-focused organisation will return to its roots as a direct investor in emerging markets.

Members of the public are being asked to submit their thoughts on how CDC Group, the UK government-owned fund of funds, should focus its resources in order to best poverty around the globe.

Today marks the beginning of the consultation process, which will be run via an online questionnaire and will end in January 2011. CDC’s new business plan will be published in Spring 2011, according to a statement from the Department for International Development, which owns CDC.

“The reformed CDC will resume direct investments and have a wider range of financial tools at its disposal, such as debt, equity and guarantees,” the statement said. Currently CDC operates exclusively as a fund investor, stimulating economic activity by committing to emerging markets private equity managers. In the past the organisation made direct investments into businesses and projects, although this ceased in 2004, when the group’s direct investment arms spun out.

The latest move to reform CDC comes after a review in 2009, which resulted in the installation of a new investment policy. Under the revised policy, CDC currently makes 75 percent of new investments in low-income countries, defined as countries with an annual gross national income per capita of less than $905 in 2006.

“CDC will be the jewel in the crown of the UK’s efforts to maximise the private sector’s potential to contribute to development,” said Andrew Mitchell, the Secretary of State for International Development, in a statement. “Reforms will allow CDC to put more investment in businesses which would never otherwise have been considered.