Investment by PE undshelped stimulate signif-cant job creation
DOS data were available or 494 com-panies, representing $405 million o IFC investment capital. Tese compa-nies have created 293,792 jobs and cur-rently provide, or at the time o exit by the unds provided, 724,478 jobs. For asubset o companies, employment databy gender were available. Tis subseto companies employed about 170,000 women, which represented 41% o jobs.PE unds have been able to leverageIFC’s nancial resources to drive jobgrowth and to extend IFC’s reach by providing capital to SMEs (which ac-counted or 306 o the 494 companies).In Sub-Saharan Arica and South Asia,three-quarters o investments by PEunds were in SMEs (gure 1). Te PEunds have produced strong nancialreturns that compare avorably with theCambridge Associates Private Equity Benchmark.
Expansion-stage companiescreated the most jobs
Te companies that created the most jobs in absolute terms tended to be es-tablished businesses in an expansionary stage. In the portolio o PE unds, thebiggest job creators were in services. Telargest job creation occurred in a retailchain or women’s shoes in China. Itcreated more than 70,000 jobs in oversix years, starting at 17,000 and grow-ing to over 87,000 employees (with anannualized job growth rate o 29.5%). Another investee, a commercial bank inChina, created more than 22,000 jobs, more than doubling employment rom ewer than 21,000 employees to more than43,000 in just over ve years (job growth rate o 14.8%). A third, a restaurant ranchise operator in Latin America, createdmore than 22,000 jobs, starting with about 64,000 employees and growing to more than 86,000 in less than two years (jobgrowth rate o 22.1%).Collectively, the 114,000 jobs represented by these three companies account or more than one-third o the jobs created by the PE unds in the portolio. Tis group also accounted or the largest employer o women, with the restaurant ranchisereporting 49,000 women employees (57%). Given the nature o the business, it is not surprising to see this sector accountor the most jobs created. All these companies started with many employees and high revenues. Te companies were established and operating whenthey raised money rom the investment unds. IFC capital was leveraged and supported by other investors’ money to achievethe impressive job creation results. While these companies did not experience the high job growth rate that many start-upsexperienced, they did create more jobs than other companies in the dataset (gure 2). Job creation in the portolio mirrored regional economic activity during the timerame. Te three highest job creators werein China and Latin America. Tese companies took advantage o economic growth happening in their locations to supportthe expansion o their businesses.
Figure 2: Larger companies created more jobs
J o b s C r e a t e d
Less than 20Employees (117Companies)
Employees at Time of InvestmentJob Creation sinceInvestment (Net)
20-99 Employees(110 Companies)100-300Employees (107Companies)+301 Employees(160 Companies)
Figure 1: A globally diversifed portolio with many SMEs inSub-Saharan Arica
C o m p a n i e s
CAFCEACLACMECEUCSAWLDRegionCAF – Sub Saharan AfricaCEA – East AsiaCLA – Latin AmericaCME – Middle EastCEU – Eastern EuropeCSA – South East AsiaWLD - WorldNon SME companySME company