British International Investment, (formerly CDC Group plc, Commonwealth Development Corporation, and Colonial Development Corporation) is the

development finance institution A development financial institution (DFI), also known as a development bank or development finance company (DFC), is a financial institution that provides risk capital for economic development projects on a non-commercial basis. , total commit ...

of the

UK government ga, Rialtas a Shoilse gd, Riaghaltas a Mhòrachd , image = HM Government logo.svg , image_size = 220px , image2 = Royal Coat of Arms of the United Kingdom (HM Government).svg , image_size2 = 180px , caption = Royal Arms , date_est ...

. The

Foreign, Commonwealth and Development Office The Foreign, Commonwealth & Development Office (FCDO) is a department of the Government of the United Kingdom. Equivalent to other countries' ministries of foreign affairs, it was created on 2 September 2020 through the merger of the Foreig ...

is responsible for the organisation, and is the sole shareholder. It has an investment portfolio valued around US$7.1 billion (year-end 2020) and since 2011 is focused on the

emerging markets An emerging market (or an emerging country or an emerging economy) is a market that has some characteristics of a developed market, but does not fully meet its standards. This includes markets that may become developed markets in the future or were ...

of South Asia and Africa.

History

Formation

The original Colonial Development Corporation was established as a statutory corporation in 1948 by

Clement Attlee Clement Richard Attlee, 1st Earl Attlee, (3 January 18838 October 1967) was a British politician who served as Prime Minister of the United Kingdom from 1945 to 1951 and Leader of the Labour Party from 1935 to 1955. He was Deputy Prime Min ...

post-war Labour government Clement Attlee was invited by King George VI to form the Attlee ministry in the United Kingdom in July 1945, succeeding Winston Churchill as Prime Minister of the United Kingdom. The Labour Party had won a landslide victory at the 1945 gene ...

, 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 A commonwealth is a traditional English term for a political community founded for the common good. Historically, it has been synonymous with " republic". The noun "commonwealth", meaning "public welfare, general good or advantage", dates from th ...

in 1969. As part of the

Commonwealth Development Corporation Act 1999 A commonwealth is a traditional English term for a political community founded for the common good. Historically, it has been synonymous with " republic". The noun "commonwealth", meaning "public welfare, general good or advantage", dates from th ...

, CDC was converted from a statutory corporation to a

public limited company A public limited company (legally abbreviated to PLC or plc) is a type of public company under United Kingdom company law, some Commonwealth jurisdictions, and the Republic of Ireland. It is a limited liability company whose shares may be fre ...

renamed CDC Group plc, with all shares owned by the UK Government.

Actis spin-out

In July 2004 CDC spun out an emerging markets private equity fund manager,

Actis Capital Actis is a global investment firm focused on the private equity, energy, infrastructure, and real estate asset classes. Actis is a signatory to the United Nations Principles for Responsible Investment (UNPRI), an investor initiative developed ...

, 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 A "fund of funds" (FOF) is an investment strategy of holding a portfolio of other investment funds rather than investing directly in stocks, bonds or other securities. This type of investing is often referred to as multi-manager investment. A ...

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 ''Private Eye'' is a British fortnightly satirical and current affairs news magazine, founded in 1961. It is published in London and has been edited by Ian Hislop since 1986. The publication is widely recognised for its prominent criticism ...

'', which devoted seven pages to criticizing the organization 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 The minister of state for development and Africa, formerly the minister of state for development and the secretary of state for international development, is a senior minister of the Crown within the Government of the United Kingdom. The offi ...

, 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.

2021 rename

In November 2021, the FCDO announced that it would rebrand the CDC as British International Investment (BII) in 2022 as part of a strategy to deepen economic, security and development ties globally, increasing its financing to 9 billion pounds by 2025. Foreign Secretary

Liz Truss Mary Elizabeth Truss (born 26 July 1975) is a British politician who briefly served as Prime Minister of the United Kingdom and Leader of the Conservative Party from September to October 2022. On her fiftieth day in office, she stepped down ...

said in the announcement the change was to "grow economies across Asia, Africa and the Caribbean while drawing them closer towards free-market democracies and building a network of liberty across the world". A group of NGOs and trade unions criticised the change as part of a move to "repurpose BII as an institution that focuses solely on private-sector investment and profit-making, rather than development goals and poverty reduction", and as part of offering an alternative to foreign partners to loans from China.

References

External links

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National Audit OfficeCDC announces 2008 Annual Results
{{Authority control Foreign, Commonwealth and Development Office Government-owned companies of the United Kingdom Financial services companies of the United Kingdom Development finance institutions 1948 establishments in the United Kingdom British companies established in 1948 Companies based in London