Written evidence submitted by Richard
Brooks, Private Eye
I enclose a copy of a report I wrote recently in
Private Eye.[1]
The central issues, in my view, are the manner in
which CDC invests through private equity funds and the businesses
in which it invests. These fail to make best use of CDC's unique
position as a publicly-owned investor and result in public money
being invested where the private sector is happy to go anyway.
Behind these questions lie concerns about the historic
development of CDC, in particular its 2004 reorganisation into
a fund of funds and a private equity fund manager, Actis. The
investment methods and incentives introduced have, in my opinion,
driven CDC away from its core development purpose. The structure
also leads to a loss of transparency in the use of public funds,
which ought to be paramount for a state-owned development fund.
I have been researching CDC in some depth for three
years.
1 (Not printed) See Richard Brooks, 3 September 2010.
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