CASE STUDY
DFIs are reinventing themselves to become major impact investors Tori Hellrung, Impact lead, CDC Plus Sarah Marchand, Director, CDC Plus
To address climate change and a growing range of social challenges, national governments increasingly expect their DFIs to go beyond being solely capital providers. One way for DFIs to evolve their expertise is by taking a value-add approach, which includes using technical assistance (TA) alongside investment capital. The lessons learned by CDC Plus in this regard indicate that effective TA requires a fact-based and nuanced approach.
AN ARTICLE BY TORI HELLRUNG Tori Hellrung is an executive at CDC Group, specialised in impact measurement and portfolio management for impact investors. Prior to CDC, Tori was a consultant at Universalia, where she evaluated the performance of clients, including the World Bank, the UN and foundations. She holds an MBA from the University of Oxford and a BA from McGill University.
SARAH MARCHAND Sarah Marchand joined CDC in 2017 and is a director of the Impact Group. She has over 15 years’ experience spanning both the private and development sectors and has worked alongside investment teams for the last decade, specialising in postinvestment value creation. Over the past ten years, Sarah has successfully set up and run technical assistance facilities linked to - but independent of - the private equity funds they support.
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s more capital becomes available from investors willing to take greater risks in emerging markets, the space historically occupied by development finance institutions (DFIs) as capital providers is getting crowded. With deepening knowledge of the climate crisis and growing social inequalities, national governments expect their DFIs to go beyond solely being capital providers, bringing DFIs to an inflection point in their evolution. There is increasing space for private sector development, which requires expertise, capital and strong relationships with market actors. This space sits between the traditional grants or loans for development and market-rate investments. At this inflection point, how will DFIs continue to be relevant in the capital markets? One opportunity is to increase their value-add as investors, building expertise
in private sector development, both directly through their portfolios and at a market level. What have DFI’s learned so far to inform this next transition? In 2018, the CDC Group, the UK’s development finance institution, formally launched a new vehicle, CDC Plus, to scale up its role as a value-adding investor. CDC Plus has committed over $50 million to more than 250 projects. It aims to make a lasting difference to the lives of under-served groups by increasing economic opportunity, improving standards of living and creating a more sustainable environment. The following four lessons – derived from facilitated workshops within CDC Plus – crystallise its strategic thinking on delivering best-in-class technical assistance (TA). What emerges from these lessons is a deeper consideration not only of what we fund, but also of how we fund and with whom.
In 2018, the CDC Group, the UK’s development finance institution, formally launched a new vehicle, CDC Plus, to scale up its role as a value-adding investor. CDC Plus has committed over $50 million to more than 250 projects.
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