French African Fund to support SMEs investing in Africa

Private equity firm AfricInvest and French investor Bpifrance have launched the new French African Fund (FAF), which will support small- and medium-sized French and African businesses investing in Africa.

AfricInvest director and Paris office head Stephane Colin told Agri Investor that the fund has raised about €80 million and plans to make minority investments of about €5 million and €10 million each investment.

Midstream agribusiness and mid-cap agri companies with growth potential are among the fund’s broader mandate, while taking social and environmental issues into consideration.

While many French companies already have links to French-speaking African countries, the FAF is designed to help those looking to expand into countries in Sub-Saharan African such as Kenya and Nigeria, Colin said.

“Industrialization of agribusiness makes so much sense in so many of these places,” he said, adding that food processing companies would be one focus.

The fund includes investors Societe Generale, Orange and Proparco. A quarter of the fund also reportedly came from African investors including Caisse Nationale de Prévoyance Sociale de Côte d’Ivoire, Saham, Financecom and the Central Bank of Kenya Pension Fund.

Economic growth tapered off in Africa last year after a decade of significant gains. But in its World Economic Outlook, the World Bank projects that the Sub-Saharan region’s GDP will grow at a 2.9 percent pace this year, an increase from tepid 1.4 percent growth experienced in 2016.

AfricInvest, which will manage the new fund, has more than $1 billion in assets under management spread across 14 funds. In February, the firm worked together with French private equity firm Siparex to launch a fund to support companies across sectors, including agriculture, in Tunisia and France. Its food and agriculture-related investments have included Moroccan food exporter Sicopa, Nigerian rice importer Elephant Group and Exat, a rubber-processing company based in Ivory Coast.

In October, the firm sold its 20 percent stake in Tunisian seeds, vegetables and plants exporter Cotugrain Hortimag to BIAT Capial Risque, the private equity arm of Tunisian bank BIAT.