Shareholder Executive

Actis

Purpose

Actis promotes and manages private equity funds in developing countries. Its principal activity is fund management on behalf of third party investors, the largest of which is CDC Group plc. Actis also mobilises private and other third party capital for investment in developing countries.

Legal Status and Ownership details

Actis was established in July 2004 as a spin out from CDC.

Actis is a limited liability partnership, owned 60% by its partners and an employee share trust and 40% by the Secretary of State for International Development. The Government has an 80% economic interest until 2013.

Government's Objectives

Vision

Actis' purpose is to develop and maintain a proven track record as a successful private equity fund manager in developing countries.

Objectives

To mobilise and invest private and other third party capital, including CDCs, to generate attractive returns for investors in a responsible manner so as to maximise the creation and long term growth of viable businesses in developing countries.

Financial Performance*

£m	20072	2006	2005
Turnover	-	55	48
Operating Profit	-	10	8
Profit available for division among members1	-	2	2
Net Cash flow	-	1	5
Net Operating Assets	-	(2)	(1)
RONA	-	-	-
Shareholders' Funds	-	2	3
Dividends	-	-	-

* Actis reports in US Dollars. These figures are converted in £Sterling using 31 December rate for each year as Actis reports on a calendar year basis. The 2004 figures only cover the period 8 July to 31 December. Figures are for the LLP only; financial returns achieved by Actis on funds under management accrue after Actis profit share to fund investors, including CDC.
1 Profit available for division among Members is stated before amounts payable under short term incentive plans to UK working partners.
2 Figures for 2007 calendar year have not been published at the date of publication of this report.

Commentary

Actis has US$6.8bn of funds raised and a growing portfolio of private equity, infrastructure and real estate investments in the emerging markets of Africa, China, Latin America, South and South East Asia.

Actis provides equity capital for buy out and growth capital as well as project finance. Much of the economic growth in emerging markets can be linked to three ma jor trends which drive the way Actis does business: rising personal wealth and consumption; increased investment in domestic infrastructure; and the demand for natural resources.

Actis continues to demonstrate its ability to attract third party capital into emerging markets. Since demerging from CDC in 2004, Actis has raised US$4.8bn in emerging markets funds from over 80 institutional investors, family offices and public sector investors around the world.

Actis had a successful year for fund investments particularly in Africa and, in recognition of this, was awarded Private Equity International magazine’s African Private Equity Firm of the Year 2007. Actis invested US$530m in businesses in a wide range of sectors across the emerging markets including consumer, financial services, healthcare, industrials, infrastructure, manufacturing and oil and gas.

In 2007, Actis also exited a number of investments in Africa, India and South East Asia, via both listings and trade sales. These included: El-Rashidi, an Egyptian confectionary company; Globeleq, an emerging markets power operating business; Platmin, a platinum exploration and mining company operating in South Africa; Punjab Tractors, the second largest tractor manufacturer in India; and Unza, South East Asia's largest independent personal care company.

2007 was not without its challenges. The fallout from the credit crunch and subsequent global economic slowdown, the dislocation in fi nancial markets, the rise in food and oil prices and inflationary pressures have impacted the markets in which Actis operates. However, these markets have also demonstrated a greater resilience than in previous cycles and underlying growth rates in most of these markets remain attractive compared to the developed markets of Europe and the US.

Actis remains committed to ensuring that the capital raised and managed makes a lasting and positive difference in the countries in which it operates.

During the year Peter Smitham was re-appointed as Chairman of the Supervisory Board and Sir Peter Bonfield’s appointment as a Non-Executive Director was extended. Stephen Shaw replaced Keki Dadiseth and Peter Wheeler joined the Board ahead of the departure of Paul Collins.