CDC commits $40m for emerging markets SMEs

The firm has committed $30m to the Kendall Court Mezzanine (Asia) Bristol Fund. This fund is targeting $150m and will focus on mezzanine growth capital and buy-out capital opportunities in SME companies in south-east Asia.

CDC has also committed $10m to Centras Private Equity Fund, which is aiming for $75m to invest in SMEs in central Asia, predominantly in the Republic of Kazakhstan.

Brian Lim, portfolio director, Pan-Asia, CDC, said, ‘These investments are made with one of CDC’s key objectives in mind, namely to bring capital to SMEs in less developed emerging economies.

‘Although the Asian private equity industry has grown strongly over the past three years, south-east Asia has seen less of this growth. With the growing migration of interest and capital to China and India, funding sources in south-east Asia have been relatively hard to access especially by SMEs looking for financing. However, mezzanine financing fits the profile of the predominantly family-run businesses in Asia. Having operated and invested in the region for four years, Kendall Court has a strong track record and will continue to capitalise on opportunities.’

Innes Meek, portfolio director, CDC, added, ‘Many central Asian countries have begun to benefit from privatisation programmes, prudent monetary and fiscal polices and more favourable investment climates resulting from legal and regulatory reforms. Despite this there are a very small number of equity players in the region and a lack of finance is a major challenge for SMEs. Centras has an excellent understanding of the local market and is positioned to take advantage of this dynamic environment to deliver financial and developmental returns.’

Established in 2004 with a $90m maiden fund, Kendall Court focuses on mid-sized transactions for development and buy-out capital.

Centras Capital, also founded in 2004, is an investment company based in the Republic of Kazakhstan.

CDC recently drew controversy after UK MP and Public Accounts Committee chairman Edward Leigh criticised CDC chief executive Richard Laing’s £970,000 a year salary.

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