Asian Development Bank

When investment funds are the best choice

When investing in the private sector, ADB has a choice between making direct investments or working through financial intermediaries such as funds, banks, or leasing companies. Our strategy depends on various factors.

We usually prefer to use investment funds in these situations:

• when funds would catalyze more capital
• when we lack expertise in a sector (for example, IT) which a fund manager could supply
• when a group of projects with similar characteristics needs funding
• when speed and flexibility are required
• when direct investment would be too risky.

We may prefer direct investment:

• when we want to maximize our policy leverage
• when we want to gain detailed knowledge in a new sector
• when a project is large and relatively slow-moving
• when commercial fund management is not available.