The Future of CDC - International Development Committee Contents

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. That's Rich! How Britain's poverty relief fund abandoned the poor … while its bosses cleaned up. Private Eye.  Back

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