Private Equity Activity in Morocco: Growth and Performance Report Year 2014
March 2015 © 2015 Grant Thornton. All rights reserved.
1
Le Capital Investissement au Maroc – Année 2014
Private Equity in Morocco : Growth and Performance – Year 2014
© 2015 Grant Thornton
Summary 1.
Scope & Methodology
3
2.
International and National Economic Context
7
3.
Fund Management Companies
14
4.
Funds under Management
16
5.
Investments
24
6.
Exits
33
7.
Private Equity Performance
36
8.
Private Equity Economic and Social Impact
38
9.
Forecast 2015
42
10. Key Figures
46
11. Annexes
48 I.
Focus on infrastructure funds
49
II.
Focus on transregional funds
50
III.
Acronyms
51
IV.
Glossary
52
Private Equity in Morocco : Growth and Performance – Year 2014
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1. SCOPE & METHODOLOGY
Scope This study includes :
• All funds management companies, members of AMIC with a local representative office in Morocco and a portion of funds to invest dedicated to Morocco
• Funds investing mainly in SMEs and unlisted companies • Limited Life Funds • Infrastructure Funds both with greenfield and brownfield investment • All investment sectors, except funds dedicated to real estate and tourism. • Data collection was done via a survey of 21 management companies / 42 funds on a self reporting basis
Private Equity in Morocco : Growth and Performance – Year 2014
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1. SCOPE & METHODOLOGY
Methodology CAPITAL RAISED • The amounts of funds raised only includes the part dedicated to Morocco and the part dedicated to Private Equity • Amounts raised by infrastructure funds are analyzed and presented separately • For transregional Funds, when the portion dedicated to Morocco has not been communicated, only actual amounts invested are reported • The review of statements of certain funds resulted in technical corrections to the amounts raised by year (hence differences from amounts presented in previous years) INVESTMENTS • The amounts invested represent amounts disbursed • Detailed investment analysis does not include “Large Caps” (transaction over 200 MMAD) as this new segment does not currently include a sufficient number of transactions EXITS AND PERFORMANCE • • • • •
Amounts exited are amounts of sales of investments IRRs represent gross IRRs upon exit as reported by the funds The scope of IRR calculations does not include partial exits or IRRs from investments of less than 1 year IRR were weighted by amounts invested Losses caused by exceptional events have note been taken into account in the average calculation of IRR
ECONOMIC AND SOCIAL IMPACT • The CAGR for turnover and employment were weighted by amounts invested Private Equity in Morocco : Growth and Performance – Year 2014
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© 2015 Grant Thornton
1. SCOPE & METHODOLOGY
Fund management companies
Fund management companies
Funds Kantara LP
ABRAAJ GROUP
ALMAMED ATLAMED
ATTIJARI INVEST
CFG CAPITAL
Aureos Africa Fund
Funds CFG Développement Idraj
Africa Health Fund
ENTREPRISE PARTNERS
3P Fund
Anaf II
FIROGEST
Firo
Massinissa
HOLDAGRO
Targa
Massinissa Luxembourg
INFRA INVEST
Argan Infrastructure Fund
AM Invest Morocco
MPEF I
Agram Invest
MPEF II
Igrane
MAROC INVEST
MPEF III
Moroccan Infrastructure Fund
Africinvest I
AZUR PARTNERS
Nebetou Fund
Africinvest III
BMCI DEVELOPPEMENT
BMCI Développement
BROOKSTONE PARTNERS CDG CAPITAL INFRASTRUCTURE
MITC CAPITAL
Maroc Numeric Fund Mediterrania I
MJT Park
MEDITERRANIA CAPITAL PARTNERS
Inframed
PRIVATE EQUITY INITIATIVES
PME Croissance
Emerald Fund
Inframaroc
Upline Technologies
Accès Capital Atlantique CDG CAPITAL PRIVATE EQUITY
UPLINE INVESTMENTS
Sindibad
Upline Investment Fund Moussahama I et II
Cap Mezzanine
OIFFA
Capital Morocco CAPITAL INVEST
Mediterrania II
VALORIS CAPITAL
Capital North Africa Venture Fund New funds in 2014
Capital North Africa Venture Fund II
Funds in divestment phase or divested
Note : Dayam, Aureos et Viveris are no longer part of the scope, but their historical data are retained Private Equity in Morocco : Growth and Performance – Year 2014
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© 2015 Grant Thornton
Summary 1.
Scope & Methodology
3
2.
International and National Economic Context
7
3.
Fund Management Companies
14
4.
Funds under Management
16
5.
Investments
24
6.
Exits
33
7.
Private Equity Performance
36
8.
Private Equity Economic and Social Impact
38
9.
Forecasts 2015
42
10. Key Figures
46
11. Annexes
48 I.
Focus on infrastructure funds
49
II.
Focus on transregional funds
50
III.
Acronyms
51
IV.
Glossary
52
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2. INTERNATIONAL AND NATIONAL ECONOMIC CONTEXT
Evolution of real GDP growth between 2012 et 2014
Comments
[%, 2012-2014] 4.9%
5.0 4.5
The recovery in advanced countries is moderated and uneven :
4.7% 4.4%
4.4%
•
4.0 3.5
3.1%
3.3% 3.3%
3.0
2.7%
2.6%
2.5 2.0
• Stronger recovery in the US benefiting from accommodating financial conditions
1.5
1.0
Slow recovery in Europe despite declining oil prices and borrowing rates, persistent deflation risks and risks related to the Ukrainian crisis
0.8%
0.5 0.0 -0.5 -1.0
-0.7 -0.5
World
Europe
Emerging markets
Moderate but still strong growth in emerging and developing countries. In 2013/2014, the pace of growth is variable across regions : Asia stabilizes at 6.5%, Sub Saharan Africa at 5% and North Africa Middle East at 2.5%
Morocco
and developing
2012 2013 2014 Source : International Monetary Fund – Global Outlook January 2015
In 2014, slow recovery of the global economy despite the drop in oil prices Private Equity in Morocco : Growth and Performance – Year 2014
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2. INTERNATIONAL AND NATIONAL ECONOMIC CONTEXT
Comments
Historical trends and forecast [%,
2001-2016 forecasted]
• The positive impact of lower oil prices on growth is offset by the weakness of the overall investment
10% 8% 6%
4.7% 4.0% 3.7%
4.4% 4%
3.3%
2%
2.6% 0.8%
1.4%
• Growth forecasts worldwide have been scaled down globally in January 2015, except in the United States • The recovery is particularly slow in Europe • Growth in emerging markets will be measured because of the slowdown in China and the deteriorating situation in Russia in particular
0% - 2% - 4% - 6% 01
02
03
04
05
06
07
08
09
10
11
12
13
Eurozone
Morocco
World
Emerging markets and developing
14
15f
16f
• Morocco, after a year of weak growth in 2014 should return to growth rates approaching 4.5 to 5% in 2015
Source : International Monetary Fund – Global Outlook January 2015
World growth is expected to increase 3.3 % in 2014 to 3.7 % in 2016 but the pace of recovery is uneven between regions Private Equity in Morocco : Growth and Performance – Year 2014
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2. INTERNATIONAL AND NATIONAL ECONOMIC CONTEXT
Private Equity penetration rate – Capital invested/GDP (%) 1.8
0.08 0.08
1.74 1.64
1.6 1.47
0.04
1.4 1.18 1.23
1.2
1.04
1.03 1.0
0.99
Morocco
0.81 0.8 0.6 0.4
0.24 0.2
0.20 0.25 0.18 0.19 0.19 0.20 0.14 0.11 0.08 0.01 0.15 0.06 0.10 0.12 0.09 0.12 0.09 0.05 0.05 0.04 0.04 0.02 0.01
0.0 Israel
USA
UK
2012
2013
2014
S. Korea
India
Brazil
Sub Saharan China Africa
South Africa
Turkey
MENA
Source : EMPEA
Morocco, with a penetration rate of 0.08% in 2014, has outperformed since 2013 all MENA region countries Private Equity in Morocco : Growth and Performance – Year 2014
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2. INTERNATIONAL AND NATIONAL ECONOMIC CONTEXT
Evolution of global amounts raised between 2001 and 2014 [Bln USD, 2001-2014]
653
666 +191%
541
495 431 348 315
296 220
228
208
170
141 101
01
02
03
04
05
06
07
08
09
10
11
12
13
14
Source : Preqin
Fundraising is increasing since 2012 Private Equity in Morocco : Growth and Performance – Year 2014
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© 2015 Grant Thornton
2. INTERNATIONAL AND NATIONAL ECONOMIC CONTEXT
Distribution of amounts raised worldwide in 2014
Europe
131 Bln $ North America
Asia
290 Bln $
55 Bln $
Latin America
Rest of the world
16 Bln $
4 Bln $
Source : Preqin
Private Equity in Morocco : Growth and Performance – Year 2014
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2. INTERNATIONAL AND NATIONAL ECONOMIC CONTEXT
GDP & real GDP growth
Inflation
Unemployment rate
[Bln MAD, %, 2011-2014]
[%, 2009-2014]
[%, 2009-2014] 9.1%
1,000
805
896
873
828
8.9%
9%
9.2%
9.8%
2011
2012
2013
2014
6 1.8
4 500
9.1%
1
1.9
0.9
2
Ø2
1.3 0,4%
0
0 2011
GDP
2012
2013
2014
2009
2010
2011
2012
2013
2014
2009
2010
GDP Growth
FDI
Household consumption
International ratings
[Bln MAD, 2009-2014]
[Millions MAD, 2009-2014]
Standard & Poor’s BBB-/Stable
32
418
438
471
482
501
516
2009
2010
2011
2012
2013
2014
26
25
2009
2010
2011
29
27.7
28.5
2012
2013
2014
Fitch BBB-/Stable
Sources : High Commission for Planning , MEF, Foreign Exchange Office
Slower growth in 2014 was due to a poor agricultural year, the sluggish construction sector and stagnation in Europe, a strategic trading partner of Morocco More favorable perspectives for 2015 where growth should be between 4.5 and 5% Private Equity in Morocco : Growth and Performance – Year 2014
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© 2015 Grant Thornton
Summary 1.
Scope & Methodology
3
2.
International and National Economic Context
7
3.
Fund Management Companies
14
4.
Funds under Management
16
5.
Investments
24
6.
Exits
33
7.
Private Equity Performance
36
8.
Private Equity Economic and Social Impact
38
9.
Forecasts 2015
42
10. Key Figures
46
11. Annexes
48 I.
Focus on infrastructure funds
49
II.
Focus on transregional funds
50
III.
Acronyms
51
IV.
Glossary
52
Private Equity in Morocco : Growth and Performance – Year 2014
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3. FUND MANAGEMENT COMPANIES
Investment comittees (in number)
24%
29%
Distribution of the capital of fund management companies 2% 3%
27%
2% 5%
32% 57%
31% 48%
2013
41%
2014
Internal comittees only Comittees with some investors or experts Comittees with the systematic presence of investors
Financial institutions
Caisse de dépôt
Management teams
Individuals
Investment companies
Others*
* Funds of funds, private holdings, government agencies
Number of fund management companies : 21 including 3 dedicated to infrastructure Discretionary management : 57% Average staffing (including Infra) : 5.7 including 4 working on investing activities and 1.7 in support Private Equity in Morocco : Growth and Performance – Year 2014
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© 2015 Grant Thornton
Summary 1.
Scope & Methodology
3
2.
International and National Economic Context
7
3.
Fund Management Companies
14
4.
Funds under Management
16
5.
Investments
24
6.
Exits
33
7.
Private Equity Performance
36
8.
Private Equity Economic and Social Impact
38
9.
Forecasts 2015
42
10. Key Figures
46
11. Annexes
48 I.
Focus on infrastructure funds
49
II.
Focus on transregional funds
50
III.
Acronyms
51
IV.
Glossary
52
Private Equity in Morocco : Growth and Performance – Year 2014
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4. FUNDS UNDER MANAGEMENT
Distribution of funds by legal form (in number) 3%
5% 8%
5% 7%
5% 7%
13%
12%
11%
43%
42%
40%
39%
34%
34%
32%
36%
39%
End of 2010
End of 2011
End of 2012
End of 2013
6% 16%
3% 14%
47%
End of 2014
SCA: Société en Commandite par Actions, a partnership limited by shares OPCC: Special venture capital funds vehicle created by Law 18-14 – Organisme de Placement Collectif en Capital SAS : Société par Actions Simplifée, equivalent to Limited Liability Company (LLC) SA : Société Anonyme, equivalent to standard Corporation in common law
Foreign
At the end of 2014, the funds using the SA/SAS legal form are 50% of total, in continued diminuation With the enactment of Law n°18-14 relative to Collective Investment in Capital Schemes (OPCC), this legal form should substantially increase in the future Private Equity in Morocco : Growth and Performance – Year 2014
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4. FUNDS UNDER MANAGEMENT
Funds country of domiciliation (in value) Per year
Per fund generation
14%
20%
18%
27%
22%
25%
15%
16%
17%
34%
33%
26%
18%
49% -24%
59%
60%
55%
51%
51%
57% 33%
End of 2010
End of 2011
Rest of World
Europe
End of 2012
End of 2013
End of 2014
2006-2010
2011 onward
Morocco
Half of the funds are located in Morocco 2/3 of the 3rd generation (starting in 2011) are located abroad Private Equity in Morocco : Growth and Performance – Year 2014
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4. FUNDS UNDER MANAGEMENT
Nature of funds (Private Equity and Infrastructure) In value 2% 3% 2%
2% 3%
2%
2%
3%
3%
6%
5%
5%
33%
33%
4%
3% 2%
3% 11%
17%
41%
44%
37%
+22%
69% 52%
52%
End of 2011 End of 2012
Others captives
57%
58% 47%
End of 2013
2006-2010
End of 2014
Investment companies
Private Equity in Morocco : Growth and Performance – Year 2014
State captives
19
Captives financial institutions
2011 onward
Independents
© 2015 Grant Thornton
4. FUNDS UNDER MANAGEMENT
Capital raised per year (Mln MAD) 3,078 2,839 Average funds raised including Infra (2010 – 2014) : 1,947.2 Mln MAD
2,416
1,633 1,499
Average funds raised (2005 – 2009) : 991.2 Mln MAD
1,106
1,478
946
488
980
916
480
423
230
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Capital raised (including Infrastructure funds)
Total amounts raised since inception to end 2014 for Private Equity: 10.23 billion MAD Amounts raised in Morocco by infrastructure funds: 5.49 billion MAD Total amount raised by all funds: 15.72 billion MAD Private Equity in Morocco : Growth and Performance – Year 2014
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4. FUNDS UNDER MANAGEMENT
Capital raised by funds type (Mln MAD) 1,361
903
960
946 850
825 808
596
173
146
2006
2007
2008
423
393
314
2009
2010
90 2011
66 2012
117 2013
2014
6%
Moroccan funds Transregional funds
94%
94% of funds raised for Morocco over the period 2013 – 2014 were transregional Private Equity in Morocco : Growth and Performance – Year 2014
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© 2015 Grant Thornton
4. FUNDS UNDER MANAGEMENT
Capital raised by investor type (excluding infrastructure funds) In value 7% 18%
3%
2% 6% 7%
7%
9%
15%
8% 38%
1%
7%
4% 3% 1% 41%
8% 8%
9%
11%
20% 79%
30% 77%
9%
4%
6%
55%
2%
60% 21% 2011
25%
2006-2010
2011 forward
2012
2013
2014
Pension funds
Banks and asset management companies
Others*
State and public organizations
Insurance companies
International development organizations
Investment vehicles** * Others: individuals, private companies ** Investment vehicles: funds of funds, holdings, investment companies
The share of international development organizations (IFC, EBRD, EIB and others) has increased significantly with the 3rd generation funds Private Equity in Morocco : Growth and Performance – Year 2014
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4. FUNDS UNDER MANAGEMENT
Capital raised by investor nationality Other countries*
13%
13%
14%
EU Morocco * Saudi Arabia, UAE, Kuwait, Tunisia, USA
34%
41%
41%
47%
45%
End of 2013
End of 2014
53%
End of 2012
To end 2014
34% 45%
66%
55%
International development organizations
Foreign capital
Other foreign investors
Moroccan capital Private Equity in Morocco : Growth and Performance – Year 2014
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© 2015 Grant Thornton
Summary 1.
Scope & Methodology
3
2.
International and National Economic Context
7
3.
Fund Management Companies
14
4.
Funds under Management
16
5.
Investments
24
6.
Exits
33
7.
Private Equity Performance
36
8.
Private Equity Economic and Social Impact
38
9.
Forecasts 2015
42
10. Key Figures
46
11. Annexes
48 I.
Focus on infrastructure funds
49
II.
Focus on transregional funds
50
III.
Acronyms
51
IV.
Glossary
52
Private Equity in Morocco : Growth and Performance – Year 2014
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5. INVESTMENTS
Evolution of invested and reinvested funds Number of new investments
Amounts invested and reinvested (in Mln MAD)
422
432
665
585
344
1,382
50
497
547
282
10
80
309
170
35
21
2010
15
2011
112
2012
586
100
2013
696
607
89
2014
Amounts invested
12
2009
686
Amounts reinvested
15
2008
Number of companies
6
8
17
14 Including large caps
A sustained level of investment in 2014 with 696 Mln MAD invested including 14 investment acts and 11 reinvested companies 155 companies invested since inception for a total of 4.9 Bln MAD. 99 companies still in portfolio Private Equity in Morocco : Growth and Performance – Year 2014
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5. INVESTMENTS
Location of invested companies End of 2014 (in value)
9% Tangier - Tetouan
2% 1% 1%
5%
Rabat - Salé
5%
9%
9% 68% Casablanca region
9%
Fez - Boulemane 5%
68%
Meknes - Tafilalet
Other regions*
Marrakech -Tensift - Al Haouz
Rabat - Salé - Zemmour - Zaer
Foreign
Tangier - Tetouan
Fez - Boulemane
Casablanca region
*Other regions : Chaouia-Ouardigha, Gharb-Chrarda-Beni-Hssen, Oriental, Souss-Massa-Draa
Private Equity in Morocco : Growth and Performance – Year 2014
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5. INVESTMENTS
Location of invested companies By funds generation
By year 4% 12%
4% 4%
2%
9%
6%
6%
7%
4% 4%
7%
12%
2%
13%
5%
2%
1%
4%
7% 8% 5%
3%
3%
2%
4%
3% 11%
8%
26% 20%
13%
27%
75% 56%
2011
74%
72% 61%
60% 52%
2012
2013
2000 - 2005
2014
Meknes - Tafilalet
Foreign
Fez - Boulemane
Tangier - Tetouan
Marrakech -Tensift - Al Haouz
Other regions*
Rabat - Salé - Zemmour - Zaer
Casablanca region
Private Equity in Morocco : Growth and Performance – Year 2014
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2006 - 2010
2011 onward
*Other regions : Chaouia-Ouardigha, Gharb-Chrarda-Beni-Hssen, Oriental, Souss-Massa-Draa
© 2015 Grant Thornton
5. INVESTMENTS
Sectors of invested companies By funds generation 1%
End of 2014
2%
5%
3% 4%
7%
1%
9%
1% 13%
3%
4%
12%
7%
25% 14%
25%
11%
26%
13%
13%
20%
11%
29%
24%
2006 - 2010
16%
2011 onward Primary
ICT
Construction sector
Auto industry
Trade and distribution
Other industries
Chemical industry
Agribusiness
Services and transport
The industrial sector represents 47% of investments made since 2011 Services and transport sector ranks second with 29% of investments Private Equity in Morocco : Growth and Performance – Year 2014
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5. INVESTMENTS
Invested companies by development stage (in value) By funds generation
End of 2014
2% 4%
2% 5%
2%
5% 6%
60% 73%
21% 67%
25%
16% 9% 2006 - 2010
4% 2011 onward
Seed
Venture
Growth
Buy out
Turn around
2/3 of investments have been in companies in the growth stage Private Equity in Morocco : Growth and Performance – Year 2014
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5. INVESTMENTS
Companies funded by percent of capital acquired 2% 8%
11% 22% 6%
15% 8%
32% 16%
60%
47%
47%
15%
8%
2000 - 2005
4%
2006 - 2010
More than 67%
50 - 67
2011 onward
34 - 50
5 - 34
<5
The share of majority transactions declined significatively (from 30 to 17%) between 2nd and 3rd funds generation in conjunction with the decrease of buy out investments Private Equity in Morocco : Growth and Performance â&#x20AC;&#x201C; Year 2014
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5. INVESTMENTS
Companies funded by transaction size By funds generation
By year
24%
29%
29%
29% 35%
47%
50%
7%
14%
14%
6%
13%
18%
7%
12%
21%
22%
10% 10%
17% 14% 10%
7%
2010
13%
17%
10% 36%
7% 19%
10%
12%
18% 13%
10%
13%
17%
2011
2012 0 to 10 Mln MAD
24%
2013 10 to 20
18%
2014
2006 - 2010
20 to 30
30 to 40
40 to 50
23%
2011 onward
More than 50
The investment trend of the last generation of funds is towards larger transactions (36% over 40 Mln MAD) and continued investment in the seed/venture stage Private Equity in Morocco : Growth and Performance â&#x20AC;&#x201C; Year 2014
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5. INVESTMENTS
Average ticket size of new investments (Mln MAD per year) +54% 43 34 29
28 20
2010
2011
2012
2013
2014
The average ticket size invested between 2010 and 2014 is 31 Mln MAD, which has sharply increased with the 3rd generation funds Private Equity in Morocco : Growth and Performance – Year 2014
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© 2015 Grant Thornton
Summary 1.
Scope & Methodology
3
2.
International and National Economic Context
7
3.
Fund Management Companies
14
4.
Funds under Management
16
5.
Investments
24
6.
Exits
33
7.
Private Equity Performance
36
8.
Private Equity Economic and Social Impact
38
9.
Forecasts 2015
42
10. Key Figures
46
11. Annexes
48 I.
Focus on infrastructure funds
49
II.
Focus on transregional funds
50
III.
Acronyms
51
IV.
Glossary
52
Private Equity in Morocco : Growth and Performance â&#x20AC;&#x201C; Year 2014
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6. EXITS
Evolution of exits in value (Mln MAD) By year
By funds generation 360
1,115
268 688
148
+23% 99 * 81 181
35
2009
2010
2011
2012
2013
2000 - 2005
2014
2006 - 2011
2011 onward
* 2 undisclosed amounts
Exits were up 23% compared to 2013 Since inception, the total amount exited reached 2 Bln MAD, representing 41 % of the overall amount invested by the Private Equity industry Private Equity in Morocco : Growth and Performance â&#x20AC;&#x201C; Year 2014
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6. EXITS
Types of exits by generation In value
In number 3%
9%
4%
7%
5% 7%
10% 5%
19% 42%
63%
34%
19%
21%
31%
44% 30% 23%
25%
2005 - 2010
2011 onward
2005 - 2010
2011 onward
Loss realized
Private equity buyers
IPO or sale of shares
Repayments
Management
Industrials (Trade sales)
Private Equity in Morocco : Growth and Performance â&#x20AC;&#x201C; Year 2014
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Summary 1.
Scope & Methodology
3
2.
International and National Economic Context
7
3.
Fund Management Companies
14
4.
Funds under Management
16
5.
Investments
24
6.
Exits
33
7.
Private Equity Performance
36
8.
Private Equity Economic and Social Impact
38
9.
Forecasts 2015
42
10. Key Figures
46
11. Annexes
48 I.
Focus on infrastructure funds
49
II.
Focus on transregional funds
50
III.
Acronyms
51
IV.
Glossary
52
Private Equity in Morocco : Growth and Performance â&#x20AC;&#x201C; Year 2014
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7. PRIVATE EQUITY PERFORMANCE
Gross Internal Rate of Return (IRR)* & Multiple
Unweighted average IRR per quartile
2000 - 2014 42%
2.1 x 15 %
18%
7% 1st Quartile Gross IRR
2nd Quartile
Global multiple
3rd Quartile
4th Quartile
* Average Gross IRR on exits (Cf. Methodology)
-21%
Weighted average IRR by the end of 2014 : 15% Average multiple (unweighted) : 2.1 (Seed - Venture : 1.1 / Growth : 2.7 / Buy out : 1.5)
Average investment length: 5.6 years Private Equity in Morocco : Growth and Performance – Year 2014
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© 2015 Grant Thornton
Summary 1.
Scope & Methodology
3
2.
International and National Economic Context
7
3.
Fund Management Companies
14
4.
Funds under Management
16
5.
Investments
24
6.
Exits
33
7.
Private Equity Performance
36
8.
Private Equity Economic and Social Impact
38
9.
Forecasts 2015
42
10. Key Figures
46
11. Annexes
48 I.
Focus on infrastructure funds
49
II.
Focus on transregional funds
50
III.
Acronyms
51
IV.
Glossary
52
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8. PRIVATE EQUITY ECONOMY AND SOCIAL IMPACT
Turnover growth and employment growth of invested companies (by end 2014) Turnover CAGR (compound annual growth rate) of invested companies by the end of 2014* = 15.37 %
Employment CAGR by the end of 2014* = 4.2 %
CAGR by end of 2013 = 13,8 % CAGR by end of 2012 = 16,41 %
CAGR by end of 2013 = 7,7 % CAGR by end of 2012 = 9 %
* Based on data of 73 invested companies
Employment CAGR by development stage
Turnover CAGR by development stage
18% 57%
13
18
42
17%
4%
1%
Growth
Buy out / Turn around
- 1% Buy out
Seed / Venture
Growth
Seed / Venture
Turnover CAGR by sector 23% 13%
13%
14%
16%
11
5
10
12
Agribusiness
ICT
18%
11
19
Other Construction Trade and Services BTP distribution industries
X Number of companies by sector / category
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8. PRIVATE EQUITY ECONOMY AND SOCIAL IMPACT – CSR and Certification
Annual training plan
Strategic workforce planning
66%
Code of ethics
42%
56%
32% 16%
21%
At time of acquisition
End of 2014
Actions engaging the company in social activities
At time of acquisition
End of 2014
Actions for environmental protection
28%
At time of acquisition
Quality management system ISO 9001
30%
15%
End of 2014
37%
19% 13%
At time of acquisition
End of 2014
At time of acquisition
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End of 2014
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At time of acquisition
End of 2014
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8. PRIVATE EQUITY ECONOMY AND SOCIAL IMPACT – Governance
Company audit 100%
Oversight and steering committees
Reporting tools
98%
98%
67% 38%
At time of acquisition
End of 2014
Performance indicators and scoreboards
37%
At time of acquisition
End of 2014
End of 2014
Budgeting and budget monitoring policies
98%
96%
42%
At time of acquisition
At time of acquisition
37%
End of 2014
At time of acquisition
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End of 2014
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Summary 1.
Scope & Methodology
3
2.
International and National Economic Context
7
3.
Fund Management Companies
14
4.
Funds under Management
16
5.
Investments
24
6.
Exits
33
7.
Private Equity Performance
36
8.
Private Equity Economic and Social Impact
38
9.
Forecasts 2015
42
10. Key figures
46
11. Annexes
48 I.
Focus on infrastructure funds
49
II.
Focus on transregional funds
50
III.
Acronyms
51
IV.
Glossary
52
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9. FORECASTS 2015
Main challenges for 2015
Priority investment areas (for transregional funds)
5% 9% 25%
28% 30% 13%
25%
17% 23% 26%
Investing in new companies Fundraising
Morocco
Sub Saharan Africa
Managing underperforming companies
Tunisia
Algeria
Egypt
Other countries
Identifying exits
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9. FORECASTS 2015
Planned fund raising for new funds
Planned exits for the majority of portfolio companies 35%
26% 22%
29%
22%
15%
15%
18% 12% 6%
S1 2015
S2 2015
S1 2016
S2 2016 Not planned
S1 2015
S2 2015
S1 2016
S2 2016
Not planned
Investments forecasts for 2015 by development stage in Mln MAD 1,458 1,159
204
95 Seed / Venture
Growth
Buy out
Total
* 11 management companies
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9. FORECASTS 2015
Investment sectors over the next 5 years
6%
4%
Investment regions over the next 5 years
10%
15%
6%
16%
10%
7% 12% 15%
11%
7% 10% 8%
12% 8% 9%
14%
9% 12%
Agribusiness
Health
Telecom
Services
New technologies
BTP
Energy
Consumer goods
Automobile
Casablanca
Marrakech
Agadir
Oujda
Distribution
Transport and Logistics
Education
Rabat
Tangier
Fez
Laayoune
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Summary 1.
Scope & Methodology
3
2.
International and National Economic Context
7
3.
Fund Management Companies
14
4.
Funds under Management
16
5.
Investments
24
6.
Exits
33
7.
Private Equity Performance
36
8.
Private Equity Economic and Social Impact
38
9.
Forecasts 2015
42
10. Key Figures
46
11. Annexes
48 I.
Focus on infrastructure funds
49
II.
Focus on transregional funds
50
III.
Acronyms
51
IV.
Glossary
52
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10. KEY FIGURES 2014
Funds raised
15.7 Bln MAD raised by Private Equity and infrastructure funds
94 % funds raised since 2012 are by transregional funds
4 Bln MAD still available for investment
Investments
4.9 Bln MAD invested in 155 companies by the end of 2014
696 Mln MAD invested in 2014
Average investment ticket = 43 Mln MAD
Exits
Accumulated amounts exitd = 2 Bln MAD
78 % of exits since 2011 are through trade sales or sale of shares (IPO)
Economic and social impact
98% of companies have implemented a complete system of governance
Employment CAGR = 4.2 % Turnover CAGR = 15.4 %
Performance
Weighted average gross IRR = 15%
Private Equity in Morocco : Growth and Performance â&#x20AC;&#x201C; Year 2014
Average investment time = 5.6 years
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Average multiple = 2.1
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Summary 1.
Scope & Methodology
3
2.
International and National Economic Context
7
3.
Fund Management Companies
14
4.
Funds under Management
16
5.
Investments
24
6.
Exits
33
7.
Private Equity Performance
36
8.
Private Equity Economic and Social Impact
38
9.
Forecasts 2015
42
10. Key Figures
46
11. Annexes
48 I.
Focus on infrastructure funds
49
II.
Focus on transregional funds
50
III.
Acronyms
51
IV.
Glossary
52
52
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11. ANNEXE I – FOCUS ON INFRASTRUCTURE FUNDS
Capital raised by investor type
26% Financial institutions Insurance companies 57%
International Development organizations Caisse de dépôt
13%
4%
3 management companies manage 5 infrastructure funds : 2 OPCCs and 3 foreign legal entities Target size of funds: 12.93 Bln MAD Amounts raised for Morocco: 5.49 Bln MAD Private Equity in Morocco : Growth and Performance – Year 2014
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11. ANNEXE II – FOCUS ON TRANSREGIONAL FUNDS
Amounts raised by transregional funds for Maghreb zone / Sub Saharan Africa (in Mln MAD) 8,653
5,009
1,867
1,557 220 2011
2012
2013
2014
TOTAL
For transregional funds (MPEF III, AfricInvest III, CNAV II, Mediterrania II, AAF, AHF, ANAF II), the cumulative amount of target sizes for Maghreb zone / Sub Saharn Africa is 13.6 Bln MAD Private Equity in Morocco : Growth and Performance – Year 2014
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11. ANNEXE III – ACRONYMS
Bln MAD CAGR EBRD EIB EMPEA GDP ICT IFC IPO IRR MEF MMAD OPCC
Billions of Moroccan dirhams Compound Annual Growth Rate European Bank for Reconstruction and Development European Investment Bank Emerging Markets Private Equity Association Gross Domestic Product Information and Communications Technology International Finance Corporation Initial Public Offering Internal Rate of Return Ministry of Economy and Finance Millions of Moroccan dirhams Organisme de Placement Collectif en Capital : Collective Investment in Capital Scheme
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11. ANNEXE IV – GLOSSARY
Seed Capital : Seed Capital investors bring, along with equity, a professional network and personal experience in early stage entrepreneurial projects that are still in development. Venture Capital (early stage) : Equity or quasi equity in young enterprises and start-ups. Growth Capital (late stage venture capital) : Investment in equity and quasi-equity in order to finance the development of a business or the acquisition of new stocks. The business partner is a company established in its markets, profitable and having significant growth prospects. Frequently called Growth Venture Capital. Buy out Capital (transmission capital) : Transmission capital investments in management or owner succession aimed buyouts in mature firms. Raised Capital : Confirmed investment commitments in venture or private equity funds. Invested Capital : Capital invested in enterprises by venture or private equity fund companies. Private Equity Fund : An investment vehicle that raises capital from a diverse group of investors with a view to investing in unlisted private firms and realizing capital gains shared among investors. Funds of Funds : A fund raising funds from multiple sources for investment in a diverse number of private equity funds.
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11. ANNEXE IV – GLOSSARY Transregional Funds Funds targeting several investment geographies at the country level (in contrast to ‘regional’ funds within Morocco focused on regional investment within Morocco alone) Discretionary Management : Classic private equity structure where individual investment decisions are in the hands of the management team. Exit Mode : Management Share by-back from PE investor by management of the enterprise. Exit Amount : Exit valued at proceeds of sale of investment in the enterprise. Multiple : Investment Multiple = Proceeds of sale / Invested amount. Quartile : Division of the quartiles are the values that share a set of values into four equal parts. Thus, in the distribution of IRR for example, the first quartile is the IRR below which lie 25% of IRRs. Quasi Equity : Financing vehicles that combine both debt and equity characteristic. Small and Mid Caps : The definition of small and mid caps varies depending on the maturity of the markets. In Morocco, AMIC considers that the investments “Small and Mid Caps” correspond to transactions less than 200 Mln MAD IRR (Internal Rate of Return) : Measurement of the average annualized rate of return of an investment consisting of negative flows (cash outflows) and positive flows (cash inflows). It is used to measure and monitor performance of private equity transactions. Private Equity in Morocco : Growth and Performance – Year 2014
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Founded in 2000, AMIC (the Moroccan Private Equity Association) is an independent professional association whose mission is to unite, represent and promote the private equity profession to local and international investors, entrepreneurs and governmental bodies. AMIC's main mission is to strengthen the private equity industryâ&#x20AC;&#x2122;s competitiveness in Morocco and abroad via: - Effective and clear communication about the private equity industry
Fidaroc Grant Thornton is a leading audit and consultancy firm in Morocco, and member of the Grant Thornton International, a global leader in consulting and auditing (38 500 employees, 130 countries). For over twenty years, Fidaroc Grant Thornton has supported its clients by setting a priority to listen to them and deliver creative services value. Fidaroc Grant Thornton operates in the following areas: Auditing-Statutory Auditor
- Executing reliable reports and surveys on the state of Private Equity in Morocco - Active participation in discussions on any draft law regulating the sector - Establishing a good governance and ethics code for the Private Equity industry and promoting compliance with this code - Providing support services to members on regulatory issues related to the profession
Advisory -
IFRS / Consolidation Transaction and valuation services Actuarial Management of fixed assets Business Risk Services Research and strategy Organisation Information system Improvement of the performance Certification/Categorization
Legal, tax and social services advisory - Development of a quality training program touching on all industry fundamental skills.
Site Web : www.amic.org.ma Private Equity in Morocco : Growth and Performance â&#x20AC;&#x201C; Year 2014
Outsourcing accounting and social services support
Site Web : www.fidarocgt.com Š 2015 Grant Thornton