Project detail - SPE PEF III LP

Who is our prospective customer?

SPE PEF IIl (the “Fund”) is a USD 350m (target), sector-agnostic, North Africa focused, private equity fund managed by SPE Capital (“Fund Manager” or “SPE”), which was formed in 2016 as a spin-off from a MENA focused investment bank. The Fund will pursue control-oriented growth stage equity and equity-related investments in mid-cap companies, primarily in Egypt, Morocco and Tunisia, with the objective of achieving long-term capital growth. Opportunistic investments in Sub-Saharan Africa (SSA) will be capped at 25% of total commitments.

What is our funding objective?

FMO’s commitment aims to support the Fund in achieving its first close in a challenging fundraising environment and attract new commercial investors in subsequent funding rounds. By partnering with SPE, FMO aims to support a seasoned and experienced private equity fund manager who has been on the ground and investing in African PE for over a decade. SPE will work with portfolio companies to improve competitiveness and create sustainable value, thereby contributing to the resilience of financial markets and the development of private equity as a viable funding source in Africa.

Why do we want to fund this investment?

SPE’s approach towards investments is to add value and grow the companies responsibly and efficiently, which aligns well with FMO’s commercial and impact objectives. SPE’s senior investment team is present in key markets, and its in-house ESG and impact team uses a proprietary impact management system to support portfolio companies in meeting ESG standards and achieving positive multi-dimensional impact. As a signatory to the Operating Principles for Impact Management (OPIM), SPE further underscores its commitment to responsible investing. SPE has also developed a robust gender strategy, reinforcing its commitment to promoting gender diversity and supporting the economic participation of women in its markets.

What is the Environmental and Social categorization rationale?

SPE PEF III is categorised as B+ fund, considering the E&S risk profile of the currently identified pipeline companies and their investment mandate. The pipeline companies are predominantly in the manufacturing, services, healthcare, and education sectors, for which the former (manufacturing) has some higher risk in relation to occupational health and safety and potentially pollution related aspects. Other sectors have predominant risk for adverse labour and working conditions, resulting in the likelihood that the pipeline companies trigger IFC PS1-4 related risks. The fund has the mandate to invest in Category A projects, although the likelihood given the pipeline and their ambition is considered low. Organisational capacity on E&S and their Environmental and Social Management System (ESMS) are considered of good quality.