Private equity activity showed resilience during fiscal year 2020, particularly marked by the effects of the health crisis. Fundraising accelerated to 1.35 billion dirhams, showing a clear appreciation of Moroccan funds. They have indeed gone from 30 MDH to 570 MDH.
Now is the time for optimism in the private equity business. According to the results of the study conducted by the Moroccan Association of Capital Investors (AMIC) and the Cabinet Grant Thornton, operators in the sector hope to raise no less than 4.25 billion dirhams in new funds during the 2021 financial year and MAD 1.88 billion in 2022. “A good year of fundraising is expected in 2021. Operators’ motivation is indeed present despite the crisis,” says Omar Benchekroun, manager at Fidaroc Grant Thornton.
For his part, Tarik Haddi, president of AMIC, explains that the private equity community remains optimistic in 2021 in the face of the challenges to be met, and anticipates “on the one hand, the completion of transactions in quality assets, and ” on the other hand, a return to normalcy by 2022 at the latest, in particular thanks to the recovery efforts initiated by the State and catalyzed by the Mohammed VI Fund for Investment, for which our sector reaffirms its mobilization in order to strengthen company equity and participate in a virtuous and sustainable development dynamic ”. It must be said that the ambition of investors was boosted by the good performance of the activity during a year 2020 particularly marked by the effects of the health crisis. “We had a very nice surprise this year.
Despite the constraints related to containment and the reduction of the flow of operations, several transactions were able to be carried out during the year 2020, ”says Haddi. Indeed, more than 1.35 billion dirhams of fundraising could be carried out in 2020 indicating a rise in power of Moroccan investors. The latter were able to raise 540 MDH this year against 30 MDH previously. Fund investments, for their part, appreciated by 5% to 804 million dirhams. In addition, the average investment ticket stood at 58 million dirhams. However, tickets relating to companies in the seed / risk phase have fallen between the last two generations due to an increase in the number of transactions in start-ups or small structures.
“This decrease is mainly linked to the initiatives of the Central Guarantee Fund (CCG) through the launch of new funds dedicated to seed. We are therefore seeing more and more investments with small tickets aimed at start-ups and small structures, ”explains Benchekroun.
As for investments dedicated to the development, transmission and turnaround phases, these are experiencing a continuous increase in their average ticket. The latter has almost doubled, going from 43 million dirhams between 2006-2011 to 94 million dirhams between 2017-2020, mainly in connection with the size of the funds which evolves and becomes more and more important.
“Even if the interest is more marked for development capital than for transfer capital, we observe that, in general, operators remain open to all investment opportunities,” notes Benchekroun.
At this stage, the resilience of the sector in the face of the crisis testifies, according to AMIC, of the maturity of the activity. In 2020, nearly 21 billion dirhams were raised for private equity and infrastructure, including 3.2 billion dirhams still available. Also, 9.3 billion dirhams were invested in more than 220 companies, thus bringing out an average gross IRR of 13%. This being the case, professionals in the sector hope to gain more maturity over the next few years, “but to do this, public bodies must take over,” explains Haddi. He also calls on the State to multiply initiatives such as the Innov Invest fund or the Mohammed VI Fund, which have made it possible to improve the quality and volume of national investments. “This is a global trend, and we are confident about the development of the dynamics of private equity through these institutions,” concludes Haddi.
As a reminder, the Central Guarantee Fund (CCG) has set up exceptional guarantee mechanisms “Damane Oxygène” and “Garantie Auto-entrepreneurs Covid-19”, then introduced, for the relaunch of activities, two new guarantee mechanisms : “Relance TPE” and “Damane Relance”. These devices have been a boon for the entrepreneurial ecosystem, as evidenced by the figures achieved on December 31, 2020. Less than a year after their launch, these exceptional mechanisms have benefited 66,200 companies, through the guarantee of 86,000 credits for a total amount of commitments exceeding 53 billion dirhams. In addition, these devices have also benefited companies supported by private equity funds.
Aida Lo / Eco Inspirations
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