AfricInvest is celebrating its 25th anniversary. Having raised over over EUR 1.2 billion for its funds, the company boasts more than 150 investments across 25 African countries, making it one of largest private equity firms of Africa.
“FMO has been the spark of our journey and was essential to starting and scaling up our business,” says Mebarek. “The relationship we have with the institution, but even more importantly, with your people, has brought us a long way. With FMO, we can speak openly about any wild idea we have. And almost everything we’ve built in the past 25 years, has originated from wild ideas: starting a business in a sector that was non-existent, expanding to sub-Saharan Africa, creating the first SME fund, establishing the first private credit vehicle, starting the African Private Equity and Venture Capital Association (AVCA). When others were skeptical of our ideas, FMO said: Let’s think this through and see how it can work. FMO really engages and listens in an open way. We have never felt like mere recipients of FMO funding, we’ve always felt like partners, on an equal, trusted basis. This has been instrumental in creating the AfricInvest culture, and helped ultimately to build the sector.”
With FMO, we can speak openly about any wild idea we have.
Building off the success of their first fund, Tuninvest expanded its operations to neighboring countries: Morocco and Algeria. In 2000, the firm raised the Maghreb Private Equity Fund I, the first private equity fund focused on Northern Africa.
Early 2000, FMO (Ben Zwinkels) challenged the founding partners again. By asking them to conduct due diligence assessment for FMO investments in Anglophone West-Africa, a region they had little knowledge of, or cultural proximity to. Zwinkels: “It was hard to convince the team; there was a language barrier and the region was new to them.” These exploratory FMO business assignments turned out to be the first steps towards launching the Pan-African Fund (AfricInvest Fund I, EUR 34 million). Zwinkels asked the founders to train local teams in sub-Saharan Africa and build an ecosystem of private equity in that region as well. Oueslati: “This way, we passed on the training that was given to us to five or six teams over there.”
We have to start creating the jobs of tomorrow. This is why we engaged in the space of venture capital.
Most recently, during the celebration of 25 years AfricInvest, FMO decided to invest in the partners’ new Innovation Fund, which targets young entrepreneurs and innovative start-ups across Africa. Mebarek: “There are 20 million young Africans entering the employment market on a yearly basis. Every month, labor markets deal with 1.5 million newcomers. So, we have to start creating the jobs of tomorrow. This is why we engaged in the space of venture capital. It would have been much easier and more profitable to do another big company fund for us. But we wanted to give young start-ups and companies a chance to start like we did, 25 years ago.”
Looking forward: Reinventing our relationship
“I think Africa will always need institutions like FMO,” says Oueslati. “In the coming years, AfricInvest will continue to need DFIs. It is not as if private investors are rushing to Africa. And if private money doesn’t come to Africa, we will never reach the development levels of China and other emerging markets. What private investors are looking for, is returns. For now, we still need DFIs to take the first risk and put in place blended finance structure to mitigate some of the perceived challenges which concern private investors. DFIs need to help us prove that Africa can generate profits comparable to other geographies like China. DFIs can also help us a lot by promoting our asset class to, for example, pension funds.”
FMO can support by connecting us to its network, and offering training and expertise, like we enjoyed at the start of our venture.
“Together we need to keep reinventing ourselves, and our relationship. We need FMO to remain different, stay pragmatic, Dutch and straightforward,” says Oueslati. “Together with Peter van Mierlo, CEO of FMO, we will try to set up a fund to support Dutch companies venturing into Africa. FMO is a natural partner, it could be as an investor, co-investor or sounding board. Even if it is not with funding, FMO can support us by connecting us to their network, and offering training and expertise, like we enjoyed at the start of our venture.”
2019, AfricInvest’s silver anniversary, presents the perfect moment for a deep dive into our shared history and, what turned out to also be the story of the creation of the African private equity ecosystem.
FMO interviewed two of the founding partners Aziz Mebarek and Ziad Oueslati, and Ben Zwinkels, former FMO Investment Officer and current Chairman of AfricInvest.
For more information, visit: www.africinvest.com