Private Equity Activity, Growth and Performance in Morocco report 2014

1 Le Capital Investissement au Maroc – Année 2014 © 2015 Grant Thornton. All rights reserved.

Private Equity Activity in Morocco:

Growth and Performance Report

Year 2014

March 2015

Summary

Private Equity in Morocco : Growth and Performance – Year 2014 © 2015 Grant Thornton

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1. Scope & Methodology

2. International and National Economic Context

3. Fund Management Companies

4. Funds under Management

5. Investments

6. Exits

7. Private Equity Performance

8. Private Equity Economic and Social Impact

9. Forecast 2015

10. Key Figures

11. Annexes

I. Focus on infrastructure funds

II. Focus on transregional funds

III. Acronyms

IV. Glossary


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

Scope

1. SCOPE & METHODOLOGY

4


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

Methodology


5


Fund management companies Funds

ABRAAJ GROUP

Kantara LP

Aureos Africa Fund

Africa Health Fund

Anaf II

ALMAMED Massinissa

Massinissa Luxembourg

ATLAMED AM Invest Morocco

ATTIJARI INVEST

Agram Invest

Igrane

Moroccan Infrastructure Fund

AZUR PARTNERS Nebetou Fund

BMCI DEVELOPPEMENT BMCI Développement

BROOKSTONE PARTNERS Emerald Fund

MJT Park

CDG CAPITAL INFRASTRUCTURE

Inframed

Inframaroc

CDG CAPITAL PRIVATE EQUITY

Accès Capital Atlantique

Sindibad

Cap Mezzanine

CAPITAL INVEST

Capital Morocco

Capital North Africa Venture Fund

Capital North Africa Venture Fund II

Note : Dayam, Aureos et Viveris are no longer part of the scope, but

their historical data are retained

Fund management companies Funds

CFG CAPITAL CFG Développement

Idraj

ENTREPRISE PARTNERS 3P Fund

FIROGEST Firo

HOLDAGRO Targa

INFRA INVEST Argan Infrastructure Fund

MAROC INVEST

MPEF I

MPEF II

MPEF III

Africinvest I

Africinvest III

MITC CAPITAL Maroc Numeric Fund

MEDITERRANIA CAPITAL PARTNERS

Mediterrania I

Mediterrania II

PRIVATE EQUITY INITIATIVES PME Croissance

UPLINE INVESTMENTS

Upline Technologies

Upline Investment Fund

Moussahama I et II

OIFFA

VALORIS CAPITAL

New funds in 2014 Funds in divestment phase or

divested


6

Summary






5. Investments

6. Exits



9. Forecasts 2015

10. Key Figures

11. Annexes



III. Acronyms

IV. Glossary

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In 2014, slow recovery of the global economy despite the drop in oil prices

Evolution of real GDP growth between 2012 et 2014

[%, 2012-2014]

Comments

World Europe

Emerging

markets Morocco

The recovery in advanced countries is

moderated and uneven :

• Slow recovery in Europe despite

declining oil prices and borrowing rates,

persistent deflation risks and risks

related to the Ukrainian crisis

• Stronger recovery in the US benefiting

from accommodating financial

conditions

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%

2014

2012

2013

and developing

Source : International Monetary Fund – Global Outlook January 2015

-0.7 -0.5 -1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

2. INTERNATIONAL AND NATIONAL ECONOMIC CONTEXT

4.9%

3.3%

0.8%

2.6%

4.4% 4.4% 4.7%

3.3% 3.1%

2.7%

8


World growth is expected to increase 3.3 % in 2014 to 3.7 % in 2016 but the pace of recovery is uneven

between regions

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

• 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

• Morocco, after a year of weak growth in

2014 should return to growth rates

approaching 4.5 to 5% in 2015

Comments

Source : International Monetary Fund – Global Outlook January 2015

- 6%

- 4%

- 2%

0%

2%

4%

6%

8%

10%

15f 16f 01 02 03 04 05 06 07 08 09 10 11 12 13 14

Emerging markets and developing

Morocco

World

Eurozone

4.7%

4.0%

3.7%

1.4%

4.4%

2.6%

3.3%

0.8%

9



Private Equity penetration rate – Capital invested/GDP (%)

Source : EMPEA

Morocco, with a penetration rate of 0.08% in 2014, has outperformed since 2013 all MENA region

countries

1.74

1.03 1.04

0.24 0.19 0.20

0.09 0.09 0.04 0.04 0.05

1.18

0.99

0.25 0.20 0.14 0.11 0.08

0.06 0.05 0.01

1.64

1.23

0.81

0.18 0.19 0.12 0.12 0.15 0.10

0.02 0.01 0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

MENA Turkey South

Africa

China Sub Saharan

Africa

Brazil India S. Korea USA Israel

1.47

2013 2012 2014

Morocco

0.08 0.08

0.04

10


UK


Evolution of global amounts raised between 2001 and 2014

Fundraising is increasing since 2012

Source : Preqin

220

141

101

208

348

541

653 666

296

228

170

315

431

495

04 03 02 01

+191%

10 09 08 07 06 05 14 13 12 11

[Bln USD, 2001-2014]

11



Distribution of amounts raised worldwide in 2014

Source : Preqin

12


North

America

290 Bln $

Europe

131 Bln $

Rest of the

world

16 Bln $

Asia

55 Bln $

Latin

America

4 Bln $


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%

[Bln MAD, %, 2011-2014]

1

1.8

0.9 1.3

1.9

0,4%

Ø 2

2013 2012 2011 2010 2009

[%, 2009-2014]

2013

9.2%

2012

9%

2011

8.9%

2010

9.1%

2009

9.1%

[%, 2009-2014]

[Millions MAD, 2009-2014]

[Bln MAD, 2009-2014]

Sources : High Commission for Planning , MEF, Foreign Exchange Office

GDP Growth GDP

25

32 26

29 27.7 28.5

2013 2012 2011 2010 2009

2014 2014

9.8%

2014 2013 2012 2011 2010 2009 2014

International ratings

Fitch

BBB-/Stable BBB-/Stable

805 828 873 896

0

2

4

6

500

0

1,000

2014 2011 2013 2012

Standard & Poor’s

Unemployment rate Inflation GDP & real GDP growth

FDI Household consumption

418 438 471 482 501 516

13


Summary






5. Investments

6. Exits



9. Forecasts 2015

10. Key Figures

11. Annexes



III. Acronyms

IV. Glossary

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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

2014

Distribution of the capital of fund

management companies

Investment comittees (in number)

5%

57% 31%

3% 2%

2%

48% 41%

29% 32%

24% 27%

Comittees with the systematic presence of investors

2013

3. FUND MANAGEMENT COMPANIES

15

Internal comittees only

Comittees with some investors or experts Investment companies

Management teams

Financial institutions

Others*

Caisse de dépôt

Individuals

* Funds of funds, private holdings, government agencies

Summary






5. Investments

6. Exits



9. Forecasts 2015

10. Key Figures

11. Annexes



III. Acronyms

IV. Glossary

3

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14

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Distribution of funds by legal form (in number)

16% 14%

13% 12% 11%

3% 8% 7% 7%

3% 6% 5% 5% 5%

34%

End of 2010

47%

End of 2011

34%

43%

End of 2012 End of 2013

42%

32% 36%

40% 39%

End of 2014

39%

Foreign

SA : Société Anonyme, equivalent to standard Corporation in common law

SAS : Société par Actions Simplifée, equivalent to Limited Liability Company (LLC)

OPCC: Special venture capital funds vehicle created by Law 18-14 – Organisme de Placement Collectif en Capital

SCA: Société en Commandite par Actions, a partnership limited by shares

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

4. FUNDS UNDER MANAGEMENT

17




End of 2012

57%

33%

26%

49%

18%

2011 onward

17%

2006-2010

-24%

Europe Rest of World Morocco

Per year Per fund generation

Funds country of domiciliation (in value)

Half of the funds are located in Morocco

2/3 of the 3rd generation (starting in 2011) are located abroad

59% 55% 60%

51% 51%

27% 25%

22% 34% 33%

18% 16% 20% 15% 14%

18



In value

2% 6% 5% 5%

3% 3% 3% 3%

2% 2% 2% 2%

End of 2014

33%

58%

End of 2013

57%

33%

End of 2012

52%

37%

End of 2011

52%

41%

Independents Captives financial institutions State captives Investment companies Others captives

2% 11% 4%

3% 3%

69%

17%

2006-2010

47%

44%

2011 onward

+22%

Nature of funds (Private Equity and Infrastructure)

19



Capital raised per year (Mln MAD)

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

230

488

946

480

916

423

2014

1,478

2012 2011 2010 2009 2008

1,633

2007

1,106

2006

1,499

2005

Average

funds raised

(2005 – 2009) :

991.2 Mln MAD

Average funds

raised including

Infra (2010 – 2014) :

1,947.2 Mln MAD

2,839

980

2,416

3,078

Capital raised (including Infrastructure funds)

2013

20



596

960

825

314

946

90

850

117

903

146

808

173

393

66

423

2007 2006 2014 2013

1,361

2012 2011 2010

-

2009 2008

Transregional funds

Moroccan funds 6%

94%

Capital raised by funds type (Mln MAD)

94% of funds raised for Morocco over the period 2013 – 2014 were transregional

21



In value

1%

2%

1% 41%

15%

4%

8%

4%

6%

20%

3%

7%

9%

9%

77%

38%

2011 2014

55%

79%

2013 2012

21%

30%

8% 8%

7%

7% 6% 3% 2%

18%

2011 forward

60%

11%

7%

9%

25%

2006-2010

* Others: individuals, private companies

** Investment vehicles: funds of funds, holdings, investment companies

Insurance companies

Others* State and public organizations

Pension funds

International development organizations

Investment vehicles**

Banks and asset management companies

Capital raised by investor type (excluding infrastructure funds)

The share of international development organizations (IFC, EBRD, EIB and others) has increased

significantly with the 3rd generation funds

22



* Saudi Arabia, UAE, Kuwait, Tunisia, USA

53% 47% 45%

34% 41% 41%

End of 2012

13% 13%

End of 2014

14%

End of 2013

EU

Other countries*

Morocco

45% 55%

Moroccan capital

Foreign capital

34%

66%

Other foreign investors

International development organizations

To end 2014

Capital raised by investor nationality

23


Summary






5. Investments

6. Exits



9. Forecasts 2015

10. Key Figures

11. Annexes



III. Acronyms

IV. Glossary

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Evolution of invested and reinvested funds

15

12

21

15

6

17

14

Amounts invested and reinvested (in Mln MAD)

50

80

112

100

89

497

422

585

309

170

586

607

2008 547

2014 696

2013 686

2012 282

2011 344 35

2010 665

2009 432 10

Amounts invested Amounts reinvested Number of companies

Number of new investments

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

Including large caps

8 1,382

5. INVESTMENTS

25


Location of invested companies

5% 5%

9%

9%

68%

5%

9 %

9%

Tangier - Tetouan

Casablanca region

68% Fez - Boulemane

Rabat - Salé

End of 2014 (in value)

*Other regions : Chaouia-Ouardigha, Gharb-Chrarda-Beni-Hssen,

Oriental, Souss-Massa-Draa

Rabat - Salé - Zemmour - Zaer

Tangier - Tetouan

Fez - Boulemane Casablanca region

Other regions*

Foreign

Marrakech -Tensift - Al Haouz

Meknes - Tafilalet

1 %

2 % 1 %

26

5. INVESTMENTS


2% 7%

26%

12%

5%

6% 6%

12%

2%

2%

4% 4%

4%

7%

9%

2014 2013

52%

27%

75%

2012

60%

2011

56%

20%

Casablanca region

Tangier - Tetouan

Rabat - Salé - Zemmour - Zaer

Fez - Boulemane

Other regions*

Foreign

Marrakech -Tensift - Al Haouz

Meknes - Tafilalet *Other regions : Chaouia-Ouardigha, Gharb-Chrarda-Beni-Hssen,

Oriental, Souss-Massa-Draa

By year

13% 5%

11%

8% 3%

4%

7%

4% 4% 2%

4% 3%

1% 3%

2011 onward

61%

13%

2006 - 2010

72%

8%

2000 - 2005

74%

By funds generation

27

5. INVESTMENTS

Location of invested companies


Sectors of invested companies

25%

12% 13%

9% 1%

4% 7%

3% 2% 5%

14%

26%

2011 onward

29%

2006 - 2010

24%

11%

13%

3% 4%

7%

11%

16%

13%

25%

20%

Auto industry

Primary ICT

Chemical industry

Trade and distribution

Agribusiness

Other industries

Construction sector

Services and transport

By funds generation End of 2014

The industrial sector represents 47% of investments made since 2011

Services and transport sector ranks second with 29% of investments

1%

1%

28

5. INVESTMENTS


Invested companies by development stage (in value)

9% 4%

25%

16%

60%

73%

4% 5%

2011 onward 2006 - 2010

By funds generation

2/3 of investments have been in companies in the growth stage

2% 2%

67%

6%

21%

5% 2%

End of 2014

Turn around Venture Seed Buy out Growth

29

5. INVESTMENTS


Companies funded by percent of capital acquired

15% 8%

4%

60%

47% 47%

15%

16% 32%

8%

8%

6% 22%

11%

2011 onward 2006 - 2010 2000 - 2005

2%

More than 67% <5 5 - 34 34 - 50 50 - 67

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

30

5. INVESTMENTS


18% 23%

10%

13% 12%

10% 10%

10%

22% 10%

29% 35%

2006 - 2010 2011 onward

More than 50 40 to 50 30 to 40 20 to 30 10 to 20 0 to 10 Mln MAD

19% 13% 17%

24%

36%

10%

7%

18%

21%

14%

13% 17%

12% 14%

7%

18% 7% 14%

13%

17%

6%

7%

29%

47% 50%

24% 29%

2014 2013 2012 2011 2010

By year By funds generation

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

31

Companies funded by transaction size

5. INVESTMENTS


Average ticket size of new investments (Mln MAD per year)

29

20

28

34

43

2014 2013 2012

+54%

2011 2010

The average ticket size invested between 2010 and 2014 is 31 Mln MAD, which has sharply increased

with the 3rd generation funds

32

5. INVESTMENTS

Summary






5. Investments

6. Exits



9. Forecasts 2015

10. Key Figures

11. Annexes



III. Acronyms

IV. Glossary

3

7

14

16

24

33

36

38

42

46

48

49

50

51

52

33


35

268

360

148

81

99

+23%

2013 2014 2012 2011 2010 2009

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

Evolution of exits in value (Mln MAD)

By year By funds generation

181

688

2006 - 2011 2011 onward 2000 - 2005

1,115

* 2 undisclosed amounts

*

6. EXITS

34


3%

10%

7%

2011 onward

44%

34%

5%

2005 - 2010

25%

63%

9%

Industrials (Trade sales)

Private equity buyers IPO or sale of shares

Repayments Management

Loss realized

19%

4%

7%

5%

31%

42%

2005 - 2010

23%

19%

2011 onward

30%

21%

In value In number

Types of exits by generation

35

6. EXITS

Summary






5. Investments

6. Exits



9. Forecasts 2015

10. Key Figures

11. Annexes



III. Acronyms

IV. Glossary

3

7

14

16

24

33

36

38

42

46

48

49

50

51

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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

42%

18%

7%

-21%

1st Quartile

2nd Quartile 3rd Quartile 4th Quartile

Unweighted average IRR per quartile

2.1 x

Gross IRR

15 %

Global multiple

Gross Internal Rate of

Return (IRR)* & Multiple 2000 - 2014

* Average Gross IRR on exits (Cf. Methodology)

7. PRIVATE EQUITY PERFORMANCE

37

Summary






5. Investments

6. Exits



9. Forecasts 2015

10. Key Figures

11. Annexes



III. Acronyms

IV. Glossary

3

7

14

16

24

33

36

38

42

46

48

49

50

51

52

38


13% 13% 14% 16% 18%

23%

Trade and

distribution Services Other

industries

Construction

BTP Agribusiness ICT

Turnover CAGR (compound annual growth rate) of invested companies

by the end of 2014* = 15.37 %

CAGR by end of 2013 = 13,8 %

CAGR by end of 2012 = 16,41 %

1%

17%

57%

Seed / Venture Growth Buy out / Turn

around

Turnover CAGR by development stage

Turnover CAGR by sector

11 5 10 12 11 19

X Number of companies by sector / category

Employment CAGR by the end of 2014* = 4.2 %

CAGR by end of 2013 = 7,7 %

CAGR by end of 2012 = 9 %

- 1%

4%

18%

Seed / Venture Growth Buy out

Employment CAGR by development stage

13 42 18

Turnover growth and employment growth of invested companies (by end 2014)

* Based on data of 73 invested companies

8. PRIVATE EQUITY ECONOMY AND SOCIAL IMPACT

39


21%

66%

End of 2014 At time of acquisition

16%

42%


32%

56%


15%

28%


13%

30%


19%

37%


Annual training plan Strategic workforce planning Code of ethics

Actions engaging the

company in social activities

Actions for environmental

protection

Quality management system

ISO 9001

40

8. PRIVATE EQUITY ECONOMY AND SOCIAL IMPACT – CSR and Certification


67%

100%


38%

98%


37%

98%


42%

98%


37%

96%


Company audit Oversight and steering

committees Reporting tools

Performance indicators and

scoreboards

Budgeting and budget

monitoring policies

41

8. PRIVATE EQUITY ECONOMY AND SOCIAL IMPACT – Governance

Summary






5. Investments

6. Exits



9. Forecasts 2015

10. Key figures

11. Annexes



III. Acronyms

IV. Glossary

3

7

14

16

24

33

36

38

42

46

48

49

50

51

52

42


28%

23% 25%

25%

Identifying exits

Managing underperforming companies

Fundraising

Investing in new companies

Sub Saharan Africa Egypt

Tunisia Algeria

Morocco

Main challenges for 2015 Priority investment areas

(for transregional funds)

9. FORECASTS 2015

43

26%

13%

9%

30%

17%

5%

Other countries


12%

18%

29%

6%

35%

Not planned S2 2016 S1 2016 S2 2015 S1 2015

Planned fund raising for new funds

15%

22%

15%

22%

26%

S1 2016 S2 2015 S1 2015 Not planned S2 2016

Planned exits for the majority of portfolio companies

95 204

Total Seed / Venture

1,458

Buy out Growth

1,159

Investments forecasts for 2015 by development stage in Mln MAD

* 11 management companies

44

9. FORECASTS 2015


10%

9% 8%

8%

7%

7%

6%

6% 4%

12%

9%

15% 16%

14%

12%

12%

11%

10%

10%

15%

Health

Energy Consumer goods

New technologies

Distribution Transport and Logistics

Telecom Agribusiness

Services

Education

Automobile

BTP

Agadir

Fez

Oujda

Laayoune Rabat

Casablanca

Tangier

Marrakech

Investment sectors over the next 5 years Investment regions over the next 5 years

45

9. FORECASTS 2015

Summary






5. Investments

6. Exits



9. Forecasts 2015

10. Key Figures

11. Annexes



III. Acronyms

IV. Glossary

3

7

14

16

24

33

36

38

42

46

48

49

50

51

52

46


Funds raised

Investments

Exits

Economic and

social impact

Performance Average multiple

= 2.1

15.7 Bln MAD raised by

Private Equity and

infrastructure funds

94 % funds raised since

2012 are by transregional

funds

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

98% of companies have

implemented a complete

system of governance

Weighted average

gross IRR

= 15%

Average investment time

= 5.6 years

Employment CAGR = 4.2 %

Turnover CAGR = 15.4 %

Accumulated amounts exitd

= 2 Bln MAD

78 % of exits since 2011 are through trade

sales or sale of shares (IPO)

4 Bln MAD still

available for

investment

10. KEY FIGURES 2014

47

Summary






5. Investments

6. Exits



9. Forecasts 2015

10. Key Figures

11. Annexes



III. Acronyms

IV. Glossary

3

7

14

16

24

33

36

38

42

46

48

49

50

51

52

52

48


Capital raised by investor type

4%

13%

26%

57%

Caisse de dépôt

International Development organizations

Insurance companies

Financial institutions

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

11. ANNEXE I – FOCUS ON INFRASTRUCTURE FUNDS

49


220

2011

1,557

2012 2013

8,653

TOTAL

5,009

1,867

2014

Amounts raised by transregional funds

for Maghreb zone / Sub Saharan Africa (in Mln MAD)

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

11. ANNEXE II – FOCUS ON TRANSREGIONAL FUNDS

50


Bln MAD Billions of Moroccan dirhams

CAGR Compound Annual Growth Rate

EBRD European Bank for Reconstruction and Development

EIB European Investment Bank

EMPEA Emerging Markets Private Equity Association

GDP Gross Domestic Product

ICT Information and Communications Technology

IFC International Finance Corporation

IPO Initial Public Offering

IRR Internal Rate of Return

MEF Ministry of Economy and Finance

MMAD Millions of Moroccan dirhams

OPCC Organisme de Placement Collectif en Capital : Collective Investment in Capital

Scheme

11. ANNEXE III – ACRONYMS

51


11. ANNEXE IV – GLOSSARY

52

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.

© 2015 Grant Thornton Private Equity in Morocco : Growth and Performance – Year 2014 53

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.


Site Web : www.fidarocgt.com Site Web : www.amic.org.ma

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

industry’s competitiveness in Morocco and abroad via:

- Effective and clear communication about the private equity

industry

- 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

- Development of a quality training program touching on all

industry fundamental skills.

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

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

Outsourcing accounting and social services support

Private Equity Activity, Growth and Performance in Morocco report 2014

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