China's Mengniu Group is today the country's top seller of milk and a leading dairy product manufacturer. It got a major boost from the CDH China Fund -- a private equity fund in which IFC invested in 2002. Mengniu now serves as an incubator for small business development.
CDH China played an active role in helping the Mengniu Group to restructure its ownership and shareholding, improve its corporate governance, and expand its operations. Through its supply chain program, Mengniu helps its small suppliers access finance as well as training in animal husbandry to optimize their production.
As part of its focus on quality and innovation in the dairy industry, Mengniu has adopted and implemented international best practices and standards encompassing food safety and quality, worker health and safety standards, and environmental management.
How Equity Funds Impact Development
Over the past 20 years, and as one of the largest investors in this sector with $1.7 billion in investments in more than 100 private equity funds in emerging markets, IFC’s experience has shown that there is a strong relationship between fund performance and development impact.
The quality of the fund manager is the main driver of performance. So IFC’s investment strategy is to seek managers who add value to the companies in which they invest, rather than just supply capital.
For more information, see IFC Private Equity