AfricInvest - Part 3


25 Years AfricInvest
5 key pieces of advice when investing in Africa

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.

With their 25 years of experience of private equity investments in Africa, Ziad Oueslati and Aziz Mebarek, two of the AfricInvest founding partners, have some useful insights and advices to share with other investors looking to do business in the continent:

1. Visit investments and stay close

You need local knowledge and cultural proximity to really dig in deep and understand the industry and the ways of working. Oueslati: “We only invest in industries that we visited and can really understand. And we use local people for our due diligences. AfricInvest is a Moroccan brand in Morocco and an East-African brand in East-Africa. If you yourself happen not to have a presence, make sure to have a local partner that you trust.

2. Diversify

You should operate with regional strategy and diversify your portfolio. Because in Africa, now and in the future, there is and will remain a lot of uncertainty. Diversification of your portfolio is key, in terms of counties and regions but also in terms of sectors. Investments in Africa are a good addition to a global portfolio from a diversification perspective as developments of investments in Africa tend to have a low correlation to investments in the rest of the world.

3. Be entrepreneurial

You need to be willing to fight. Mebarek: “Countries like ours (Tunisia) are not only in need of investments when they are stable or at peace. It is especially important to remain committed when the going gets tough. These economies need investors to believe in them and push the market forward. That is why we invested in Cote D’Ivoire when the civil war started, and we invested in Algeria during the civil war. We help by investing exactly when countries are on the bottom. This is where we make the difference.”

4. Hire the right people

Investing in SMEs is not about financing alone - you need to be able to help them grow and add value to make a profit. You need to hire people who can support in terms of ESG and all levels of strategy.

5. Think out of the box to make an impact 

In all markets, offering creates demand. Mebarek: “I always give the example of a successful hotel chain Azalaï from Mali. The Group was profitable in Mali and not really in need of any additional money when we first talked to them. But when you offer to step in and show what kind of value you can add, they suddenly can decide to double their rooms, and to expand to other countries. Currently, they operate a chain of nine downtown capital city hotels in West-Africa (including a hotel in Abidjan). Azalai generates more than 4,000 direct and indirect jobs throughout the sub-region. Over years of development, the group has built a profitable and sustainable indigenous local brand, in an industry dominated by international hotel chains. This way the offer creates the market and the need to grow, to make profit and to realize sustainable and long-lasting development impact.”

Related news

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.

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