Written evidence submitted by Stephen
Dawson
First my credentials: I have been in venture capital
/ private equity in the UK for over 30 years (around the start
of the industry); the group I used to run (and now chair) has
been consistently successful and is currently managing its ninth
fund. I have been working on Jacana, tackling poverty in Africa
through SME investment, for the last 3 years.
My view is, as stated at the roundtable, that CDC
should stick to what it is good at (Fund of Fund equity investment,
with a strong African focus and willingness to make SME investments)
and not try to "compete" with the other DFIs in their
areas of specialisation. Specifically I think it would be foolish,
risky, and extremely expensive, to ask CDC to make direct investments:
this is a completely different skill and requires a presence on
the ground. The one exception to this is co-investment, where
a fund-of-funds group like CDC invests alongside (and relies heavily
on) a fund manager in whom it has invested and who has a proven
track record. This will require some extra people with different
skills but can significantly enhance returns.
This does not mean CDC should stay exactly the same:
I believe it should be encouraged to make riskier investments
by setting differential return targets for its "mainstream"
and "innovative" or "frontier" investments.
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