The EBRD has demonstrated its strong support for the development of the private equity sector in Morocco and Tunisia and for the growth of equity funding for small and medium-sized enterprises (SMEs) in those economies.
On Monday 22 October, EBRD President Sir Suma Chakrabarti signed the EBRD's first investment in a fund in the two countries, a €20 million commitment in the Maghreb Private Equity Fund III (MPEF III).
The fund is the third Maghreb-focused fund managed by AfricInvest-TunInvest, one of the most established local private equity players in the region.
MPEF III, which has a target size of €200 million, will focus primarily on providing equity, quasi-equity and equity-linked debt financing to SMEs. Typically, these will be well-established, family-owned companies with the potential to scale-up their activities at the regional or international level and achieve long-term capital growth. At first closing in September 2011, €96 million was committed to MPEF III.
The EBRD’s commitment to the fund will only be used for investments in Morocco and Tunisia and Egypt, when Egypt becomes a potential recipient country of the EBRD. In all three countries, SMEs are the backbone of the economy and a key growth driver but struggle to access finance, either in the shape of debt or equity. The Bank’s investment will help improve the operational and governance standards of investee companies, as well as expand SMEs’ access to finance.
By supporting a leading regional private equity player, the EBRD will also help to increase investor awareness in the southern and eastern Mediterranean (SEMED) region and strengthen the private equity industry there. This is in line with the EBRD’s strategic priorities of strengthening the financial sector in the countries in which it invests.
Aziz Mebarek and Ziad Oueslati, co-founders of AfricInvest-TunInvest, said: “We are really proud and humbled to be the first recipient of the EBRD equity financing to support the SME sector, a major pillar of our economies and a main source of job creation in the region. We are convinced that Tunisia and Morocco will strongly benefit from the EBRD’s rich experience with transition countries, through its financial and technical assistance support to the private sector.”
Anne Fossemalle, the EBRD’s Director for Equity Funds, said: “The EBRD is very pleased to sign its first engagement in a private equity fund in the SEMED region with AfricInvest-TunInvest, a key and well-established player in the region. This investment will ultimately support SMEs’ institutionalisation, access to capital, growth and value creation.”
AfricInvest-TunInvest was founded in 1994 and is a leading private equity firm in north and sub-Saharan Africa with over US$ 700 million of assets under management. AfricInvest-TunInvest Group relies on a team of 40 highly skilled investment professionals with over 120 years of cumulative PE experience, operating out of six offices in Tunis, Casablanca, Algiers, Lagos, Abidjan and Nairobi. The AfricInvest-Tuninvest Group is the co-founder of the African Venture Capital Association (www.avcanet.com), the MENA PE Association (www.menaprivateequity.com) and the Euromed Capital Forum (www.euromed-capital.com).