PRINT THIS PAGE

CDC Capital Partners restructures to stimulate private sector growth in developing economies

CDC Capital Partners, the UK state-owned private equity and risk capital investor, has completed a restructuring that it believes will increase its ability to stimulate private sector growth in developing economies.

CDC is to split into two separate entities. The group’s investment professionals are spinning out to form Actis, a limited liability partnership in charge of managing CDC’s investments as well as up to $500m of additional capital to be raised from third-party institutions. CDC will retain its name and will continue to operate as a wholly government-owned investment company.

‘CDC already has a groundbreaking track record for assisting in the financing and development of private sector businesses in poor countries,’ said Hilary Benn, secretary of state for international development. ‘This new approach aims to significantly increase this effect, benefiting regions such as Africa and South Asia.’

Actis’ management is to acquire 60 per cent of the entity’s equity, while the UK government will retain the remaining 40 per cent. Paul Fletcher, currently CEO of CDC Group, will run the business. CDC will be led by Richard Laing, CDC’s existing finance director.

‘This represents a major innovation in the field of development finance,’ said Laing. ‘Under this new structure, CDC will, in an accountable and efficient manner, be investing UK government capital into a selection of carefully chosen funds invested in poorer counties. It is our aim to see that the private sector businesses we invest in grow in a socially responsible manner, with proper concern for corporate governance and the public interest, while ensuring that British taxpayers’ funds are invested wisely.’

Copyright © 2004 AltAssets