CDC Group plc (formerly the Commonwealth Development Corporation, and previous to that, the Colonial Development Corporation)
is a development finance institution
owned by the UK government
. The Department for International Development
is responsible for CDC, with shareholder duties managed by the Shareholder Executive
. It has an investment portfolio valued around US$5.3 billion (year end 2017) and since 2011 is focused on the emerging markets
of South Asia and Africa.
The original Colonial Development Corporation was established as a statutory corporation
in 1948 by Clement Attlee
's post-war Labour government
, to assist British colonies in the development of agriculture. Following the independence of many colonies, it was renamed the Commonwealth Development Corporation in 1963 and was permitted to invest outside the Commonwealth
As part of the Commonwealth Development Corporation Act 1999
, CDC was converted from a statutory corporation to a public limited company
renamed CDC Group plc, with all shares owned by the UK Government.
In July 2004 CDC spun out an emerging markets private equity fund manager, Actis Capital
, with a 60% stake sold to the management team. CDC remained an active sponsor of Actis's investment activities, committing the equivalent of 650 million US dollars to the firm's third fund. Following its reorganisation, CDC ceased making direct investments and became purely a fund of funds
investment company. During this period it grew in value from £1.2 billion to £2.8 billion, investing in almost 1000 businesses in 70 developing countries. These businesses employed almost a million people and paid over US$3 billion a year in taxes.
Criticisms of CDC
CDC was the subject of extensive investigations by the magazine ''Private Eye
'', which devoted seven pages to criticising the organisation in September 2010. Amongst other allegations, it claimed that CDC had moved away from financing beneficial international development towards seeking large profits from schemes that enriched CDC's managers while bringing little or no benefit to the poor; and that when Actis was spun out it was given an "implausibly low valuation". The Actis deal was also the subject of criticism by British politicians.
Review and reform
On 12 October 2010, the Secretary of State for International Development
, Andrew Mitchell
announced to Parliament that the British Government was to reconfigure CDC,
saying that whilst he applauded its financial success, it had also "become less directly engaged in serving the needs of development". On 22 October 2010 the International Development Committee
announced that it was to conduct an inquiry into CDC to examine issues such as its effectiveness and possible reforms, including its abolition.
Their report was published on 3 March 2011 with the government's response delivered on 18 May 2011. In 2011 CDC implemented a new business plan, focusing its investments on the poorer countries of South Asia and sub-Saharan Africa
, as well as once again providing direct investments to businesses alongside its fund of funds model.
* Department for International Development
* Development Finance Institution
* Actis Capital
External linksCDC – Capital for DevelopmentNational Audit OfficeCDC announces 2008 Annual Results
Category:Department for International Development
Category:Government-owned companies of the United Kingdom
Category:Financial services companies of the United Kingdom
Category:Development finance institutions