Mohamed Benchaaboun: The private equity industry will experience a major shift thanks to FM6I
The general director of the Mohammed VI Investment Fund (FM6I), Mohamed Benchaaboun, spoke at a meeting organized by the CGEM and AMIC on Wednesday in Casablanca.
2024 and 2025 will be crucial years for Moroccan private equity. This asset class should welcome massive flows channeled by the fund, offering new equity financing possibilities to Moroccan companies and ultimately constituting a nursery for the capital market during divestments. All this is made possible thanks to the deployment of FM6I, whose general director revealed several new features on Wednesday in Casablanca.
An inflection point for the sector
“The private equity industry will experience a major shift, which could play a driving role in the desired economic growth ,” projected Mohammed Benchaaboun. “ The aim of the fund is to strengthen our companies in a context marked, for the majority of Moroccan companies, by chronic undercapitalization which causes numerous difficulties in accessing financing ,” he recalled. “ We are aiming for a more robust private equity industry, with adequate financial resources and human skills ,” underlined the fund’s CEO.
Triple in size within five years
17 management companies for sectoral and thematic funds were preselected following the call for tenders launched a few months ago by the fund. This should allow this industry to triple in size over the next five years. To do this, the fund has committed to investing 6 billion dirhams, and the management companies will have to use leverage to reach a strike force of 20 billion dirhams, which will be invested in companies.
Adapt supply to demand
Another objective of the fund is to adapt supply to demand. According to Benchaaboun, "the existing funds do not cover all market segments. Also, not all sectors are covered. "There is no specialization in these sectors, which is why, among the 17 preselected management companies , 7 are specialized in specific areas: 3 in industry, 2 in the hotel industry, 1 fund for agriculture, and a fund for transport and logistics, he specified.
These 17 companies, which must have teams based in Morocco, will gradually gain expertise and will be able to export to the continent.
Benchaaboun recalled that the private equity industry is improving governance, which would also facilitate the “ Exits ” of these management companies via IPOs, thus enlivening the capital market. “ This mechanism is a nursery for the capital market ,” he summarized.
4 billion dirhams for a new subordinated debt product
For companies that are not sufficiently ready to welcome investor capital, the fund, in partnership with Tamwilcom, has set up a subordinated debt product which will be revealed soon. This quasi-equity product, a sort of mezzanine debt, makes it possible to strengthen the balance sheet and therefore make companies eligible for financing investment projects. Endowed with 4 billion dirhams, this product will provide up to a third of the financing in addition to the banking system.
A product aimed at start-ups will be unveiled this year
Latest news announced by the former Minister of Economy and Finance: A process equivalent to that intended for businesses will be put in place for the start-up segment. Mohammed Benchaaboun promises that a process will be launched by the end of March.