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MC III exceeds target size and gets €286m at final closing

Anna Lyudvig
April 22, 2020, 1:58 p.m.

Word count: 565

Mediterrania Capital Partners, a dedicated private equity firm focusing on growth investments in SMEs and mid-cap companies in Africa, has reached a €286m final closing for its third fund for Africa, Mediterrania Capital III (MC III), exceeding its target size of €250m.

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Mediterrania Capital Partners, a dedicated private equity firm focusing on growth investments in SMEs and mid-cap companies in Africa, has reached a €286m final closing for its third fund for Africa, Mediterrania Capital III (MC III), exceeding its target size of €250m.

Albert Alsina, CEO and Founder of Mediterrania Capital Partners, said: “The successful final closing was achieved thanks to the engagement of several investors at the first closing which enabled us to perform a quick deployment of those contributions therefore exposing the new assets to future investors.”

“This has been definitely a positive factor, on top of the granting of the AIFM (Alternative Investment Fund Manager) License under the Directive 2011/61/EU by the MFSA (Malta Financial Services Authority). This license requires fund managers to comply with a stringent regulatory and supervisory framework that includes strong governance processes. Those investors that are new to Mediterrania feel more comfortable investing in a GP that holds the AIFM License,” he told Africa Global Funds.

New investors in the Fund III included CDC Group, Sarona fund of funds, and several family offices and European private investors.

MC III is an 8-year fund that targets small and medium-sized enterprises in North African countries including Algeria, Egypt, Morocco and Tunisia, as well as West and Central African countries including Senegal, the Ivory Coast and Cameroon. Looking to take substantial minority or majority stakes, the fund is investing in companies that are well-established in their local markets and have the potential to scale up their activities at the regional level and across the African continent.

To date, 60% of the fund has already been invested in five portfolio companies: TGCC, a construction company in Morocco with operations in Senegal and the Ivory Coast; Cofina, a meso-finance institution in West and Central Africa operating in Ivory Coast, Senegal, Guinea Conakry, Gabon, Mali, Congo Brazzaville and Burkina Faso through a network of 90 agencies; Cairo Scan, a private provider of radiological and clinical laboratory services in Egypt; Aziza, one of the leading food retail operators in Tunisia with 280+ stores across the country covering 83,000 sq.m of sales area; and Akdital Holding, the largest private clinic in Morocco with five clinics in greater Casablanca and a capacity of 550 beds.

Alsina said: “Mediterrania is currently in the process of executing some opportunistic investments to create national and regional leaders, taking advantage of these moments of sector consolidation.”

When asked about current investment opportunites, Alsina said: “In terms of countries, Egypt, Morocco and Sub-Saharan Africa. As for sectors, Healthcare and Financial services are the strongest sectors at the moment but our pipeline remains highly diversified.”

At a time when the spread of COVID-19 pandemic is causing an unprecedented threat to people and economies around the world, MC III brings additional financial help at a crucial moment for African SMEs, according to Alsina.

“We continue to search for established African SMEs with an annual turnover of €20m to €300m and expansion strategies into North and Sub-Saharan African markets. Our focus nowadays is to identify the best assets in resilient sectors,” he stressed.

When asked if there will be a successor fund, Alsina commented: “Yes, there will be a successor fund, absolutely. However we don’t foresee starting a new fundraising process until the deployment of MC III is completed and our existing portfolios have fully recovered after the Covid-19 pandemic.”

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