Capital Business
Hicham Maarouf is the Director at CDG Capital Private Equity – The Moroccan economy grew an estimated 4.8% in 2011 in spite of a financial crisis in Europe, one of its key strategic partners. This performance is attributed to measures taken by the Moroccan government to boost local consumption. The uncertain global economic outlook made investors reluctant to part with their money, resulting in private equity fundraising in Morocco halving from MAD 1.023 billion in 2010 to MAD 480 million in 2011. As of December 31, 2011, Moroccans had raised an aggregated MAD 8 billion since the inception of the industry. Investments by private equity funds also declined from MAD 665 million in 2010 to MAD 344 million. However, the geographical focus of investments is expanding. In 2011, 16 new and seven second rounds of investments were seen in 2011, with an increasing focus on venture and seed capital types. These figures bring the total amount invested historically by PE funds till December 31, 2011 to MAD 3.2 billion. Many of the so-called first generation private equity funds in Morocco continued to exit investments, while the second generation funds made their first exits. As many as 10 exits were registered during 2011, of which two were through IPOs, generating MAD 270 million. The total amount generated historically by funds by selling their stakes in their portfolio companies totaled MAD 1.6 billion, with an average realized IRR of 20%. Moroccan PE funds were able to
revolutionize the way their portfolio companies were managed, as 95% of these companies’ managers were satisfied with funds taking stakes, according to the Centre d’Etudes Sociales, Economiques et Managériales
de HEM, or CESEM. The progress made by the young PE industry in Morocco in the past 10 years makes its prospects look promising. According to a survey, more than half of the Moroccan fund managers are working to launch new funds in 2012. In terms of regulation, the cooperation between the authorities and the Moroccan Association of Private Equity, or AMIC, will encourage fund managers to launch funds in the form of venture capital investment agencies (OPCR), which benefit from fiscal transparency. This relation will increase the flow of capital into the Moroccan market (especially from foreign investors) and will increase the investment funds’ role in supporting Moroccan small businesses and economic growth.
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