EBRD to strengthen the private equity industry in southern and eastern Mediterranean

By Nibal Zgheib

For the first time in the southern and eastern Mediterranean (SEMED) region the EBRD is supporting a Morocco-based fund manager to set a benchmark for local fund managers to become independent and regional.

The EBRD has committed up to €20 million to the Capital North Africa Venture Fund II (CNAV II), the first independent and Maghreb-focused fund to be raised by Capital Invest.

CNAV II, which just achieved a first closing of up to €80 million (target fund size €100 million), will focus on providing equity and quasi-equity financing to support the expansion of small and medium-sized enterprises (SMEs). It will also help carry out a buy-and-build approach in the targeted sectors.

The EBRD’s commitment to the fund will primarily be used for investments in Morocco and, as opportunities arise, it could also be invested in Tunisia and Egypt. The Bank’s investment will help to expand SMEs’ access to finance as well as improve the operational and governance standards of investee companies. In addition, the EBRD will contribute to strengthening the expansion of the private equity industry in Morocco and increase private investors’ awareness in the SEMED region.

Mehdi Tahiri, Omar Chikhaoui and Younes Al Abadan, the three partners of Capital Invest, said: "We are extremely privileged to have the EBRD as one of the two main investors of our fund. It is a demonstration of the confidence and attractiveness of the private equity industry in the North African region. This material commitment of the EBRD in our fund, coupled with the EBRD's track record in emerging countries will help us to strengthen our support to SMEs and also to attract private investors in our private equity industry. This is a key factor for growth, job creation and improvement of best practices in terms of environmental, social and governance systems.”

Anne Fossemalle, the EBRD’s Director for Equity Funds, said: “The EBRD is very pleased to support the first independent fund raised by Capital Invest as well as the expansion of its investment focus across the SEMED region, in particularly to Tunisia. The Bank’s commitment will ultimately support SMEs’ institutionalisation, access to capital, growth and value creation.”

Capital Invest was founded in 1999 by BMCE Bank, one of the largest commercial banks in Morocco, and Siparex, and is now an independent Morocco-based private equity firm, with three partners: Mehdi Tahiri, Omar Chikhaoui and Younes Al Abadan, having worked together for over 13 years. Capital Invest has raised and managed two Morocco-focused funds with €57 million of aggregate commitments and is perceived to be one of the leading local private equity firms in Morocco.