DEVELOPMENT FINANCE INSTITUTIONS

DEVELOPMENT FINANCE INSTITUTIONS

An institution that provides risk capital for economic development projects or funds in emerging/developing markets. DFIs are often majority owned by national governments.

 

Bilateral DFI – Independent institutions or part of a larger bilateral development bank

 

Multilateral DFI- Private sector arms of international finance institutions with shareholders ranging from national governments to private institutions. Often support the private sector through equity investments, long-term loans and guarantees.

PRIVATE SECTOR DEVELOPMENT; OECD

https://www.oecd.org/development/development-finance-institutions-private-sector-development.htm

MAJOR CONSIDERATIONS

  • Mainly focused on emerging and frontier markets

  • Can be open to smaller, emerging and niche fund managers

  • Can be 1st close investors

  • Either prioritize development in emerging markets and/or their own domestic priorities

  • Usually like co-investments and directs

LARGEST BILATERAL DFIs:

  1. IFU (Denmark) AUM - 11.2Bn

  2. OPIC (United States) AUM - 9.3Bn

  3. Swedfund (Sweden) AUM - 7.5Bn

  4. KfW/DEG (Germany) AUM - 6Bn

  5. CDC Group (UK) AUM - 4.3Bn

  6. OeEB (Austria) AUM - 1.1Bn

  7. COFIDES (Spain) AUM - 600M

  8. BIO (Belgium) AUM - 500M

  9. Finnfund (Finland) AUM - 500M

  10. FinDev (Canada)

PreQin 2020

LARGEST MULTILATERAL DFIs:

  1. European Investment Bank (AUM - 550Bn)

  2. Inter-American Development Bank (AUM - 130Bn)

  3. International Finance Corporation (AUM - 98Bn)

  4. Asian Development Bank (AUM - 82Bn)

  5. European Bank for Reconstruction and Development (AUM - 62Bn)

  6. African Development Bank (AUM - 40Bn)

  7. Islamic Development Bank (AUM - 22Bn)

PreQin 2020

ARTICLES OF INTEREST​

HOW ARE DFIs RESPONDING TO COVID-19?; DevEx

https://www.devex.com/news/how-dfis-are-responding-to-the-covid-19-crisis-97081

 

THE ROLE OF DFIs IN ENABLING THE TECHNOLOGY REVOLUTION; CSIS

https://www.csis.org/analysis/role-development-finance-institutions-enabling-technology-revolution

 

DFIs AND THEIR ROLE IN PRIVATE EQUITY FUNDS; Venable

https://www.venable.com/insights/publications/2019/02/development-finance-institutions-and-their-role