The name Alan Gillespie will probably ring more bells with business people in Northern Ireland than in the Republic, given his continuing role as the current chairman of the Industrial Development Board (IDB). Belfast-born Dr Gillespie is also a non-executive director of the Elan Corporation, the Dublin-based pharmaceutical company.
But what a lot of a people don't know is that he was recently appointed chief executive of a company called CDC Capital Partners, which, until last year, was called the Commonwealth Development Corporation. This is not surprising, given that this London-based company is little known in Europe or the US. It is, however, something of a household name in more than 50 countries in the developing world.
The CDC dates from 1948 when it was set up as part of the British government's foreign aid programme, and served as an organisation that extended low-interest loans and some venture capital to businesses in developing countries, mostly within the Commonwealth. Today, however, the company is undergoing a fundamental shift away from lending to investing equity.
In 1999, the company became one of the first state institutions to be privatised by the Labour government in London. Under what has been called a public/private partnership, the British government will retain a minority stake that allows it to veto any developments in the governance of the CDC with which it disagrees.
The idea, according to Dr Gillespie, is that 60 per cent of the company will be made available to private investors so that it can more easily access private capital. "The organisation is going through a very significant change and transformation process from a global development bank to becoming a provider of private equity capital on fully commercial terms," he said.
Dr Gillespie, who has 25 years of investment experience with both Citibank and Goldman Sachs in London, as well as an economic development Phd from Cambridge, was on the lookout last year for an alternative career challenge when the British government offered him the top job at CDC. He took up the position last December. The nature of the transition from third world development agency to a venture capital firm, while still aiming to create jobs and needed services and goods in poorer countries, means that Dr Gillespie faces what many in investment circles would consider an impossible task. The CDC will have to attract venture capital into emerging markets that are considered high risk and which rarely deliver the sort of returns that private investors demand - usually a minimum of 25 per cent.
Dr Gillespie fully understands that some investors will probably be scared off by what they perceive as the high risk involved in investing in emerging markets, but adds that the pressures of globalisation means that it is increasingly important to bring many of these economies into the world system. "Major institutions in OECD countries are actually deeply burdened about their obligations to these countries, whether it's a desire to bring health care to Africa, modernisation to China, or whatever. We can't ignore these parts of the world," he said.
He says that CDC Capital Partners is not required just to invest in the obvious developmental projects such as roads and schools, but is much more focused on investing in good businesses, especially as most of the infrastructural funds are provided by the World Bank. CDC Capital Partners is clearly an example of a freemarket capitalist approach to third world development. Dr Gillespie points out that there are equivalent organisations, often called development finance institutions, that exist in nearly every EU state. However, Ireland is not one of them.
Dr Gillespie is also a strong supporter of the Jubilee 2000 campaign, the organisation fighting for the cancellation of third world debt. He says that there is no point in looking to the past to find out how the debt situation arose. "We are where we are," he said. "Being prepared to write off this debt is not a mark of generosity. I think that's a mark of financial sophistication."
Dr Gillespie's chairmanship of the IDB means that he finds himself in Belfast once a week on average, not including the five or six visits a year he makes to Dublin on business connected with the Elan Corporation. He was involved in a recent meeting between the IDB and its opposite number in the Republic, the Industrial Development Authority (IDA), to discuss common economic areas where the two organisations could co-operate.
He says that although the two organisations still compete with each other for inward investment, it made sense to find areas of mutual economic co-operation: "We recognise that the way the world works today, people who compete with each other also co-operate."
On the subject of the growing Northern Ireland economy, Dr Gillespie believes that the current congestion in Dublin in terms of its increasingly tight labour market and high costs, will make Northern Ireland an increasingly attractive business region.
Dr Gillespie, who is about to turn 50, shows no signs of slowing down. Married with two grown-up children, he says he would like to spend more time in Ireland. He says he has firmly closed the book on his life as an investment banker. "Now to be involved in two organisations - and I think it's coincidental more than anything else that they're both owned by the UK government - whose express business is to make capital available to improve wellbeing, is both challenging and a privilege. Probably doing both these things is a bit of a stretch, but that's what I'm doing and I enjoy it."
