In a decisive move that underscores a robust confidence in the growth prospects of North and West Africa, the German development finance institution DEG (Deutsche Investitions- und Entwicklungsgesellschaft) has markedly enhanced its financial commitment to Mediterrania Capital IV (MC IV), a private equity fund adeptly managed by Mediterrania Capital Partners (MCP). This fund, under the leadership of Chairman Saâd Bendidi and Managing Partner Hatim Ben Ahmed, has successfully secured an additional €15 million (approximately $16.3 million USD) from DEG. This latest infusion brings DEG’s total investment in MC IV to €25 million, reflecting a strong belief in the fund’s potential.
The announcement of this latest investment, made public this week, follows DEG’s initial involvement with MC IV back in May 2023. The newly acquired capital is strategically designated to enhance the fund’s operational capabilities and to support its expanding portfolio of investments across the targeted regions. Mediterrania Capital Partners, a distinguished private equity firm that focuses on growth investments within the Mediterranean and Sub-Saharan Africa, launched its fourth fund with an ambitious vision to tap into the rapidly growing mid-market sector.
MC IV is designed to invest in a select group of 8 to 10 companies, with individual investments ranging from €20 million to €50 million. The fund’s investment strategy is centered on acquiring minority stakes in established, mid-sized companies that exhibit significant growth potential and opportunities for market expansion. The sectors earmarked for investment include healthcare, logistics, fast-moving consumer goods (FMCG), education, and financial services. Geographically, the fund plans to allocate 75% of its resources to North Africa, with the remaining 25% directed towards Sub-Saharan Africa.
To date, MC IV has made notable strides with two significant acquisitions in Morocco. In May 2023, the fund acquired a minority stake in Laprophan, a leading pharmaceutical company in Morocco. This was followed by an investment in October 2023 in Cash Plus, a prominent fintech company in Morocco that offers a diverse range of financial services. These initial investments highlight the fund’s commitment to its strategic objective of supporting promising businesses within the region.
DEG’s increased financial backing is further enhanced by strategic operational support through its subsidiary, DEG Impulse. This initiative aims to provide hands-on expertise and guidance to the companies within MC IV’s portfolio, focusing on improving their operational efficiency, sustainability practices, and overall impact. This dual approach—combining financial investment with strategic support—demonstrates DEG’s commitment to fostering long-term, sustainable growth within the African private equity landscape.
DEG’s initial investment in MC IV in May 2023 was part of a broader €75 million fundraising effort for the acquisition of Laprophan. This transaction also attracted participation from other notable development finance institutions, including FMO (the Dutch entrepreneurial development bank) and Proparco (the private sector arm of the French Development Agency). The continued support from DEG, along with the prior involvement of other DFIs, highlights the increasing recognition of the potential within the African private equity market and the crucial role these institutions play in driving economic development.
For Mediterrania Capital Partners, this additional funding from DEG serves as a significant endorsement of its investment strategy and its capacity to identify and nurture promising companies in North and West Africa. Under the guidance of Chairman Saâd Bendidi and Managing Partner Hatim Ben Ahmed, the firm is strategically positioned to leverage this increased capital to further expand its portfolio and contribute to the economic growth of the region. As MC IV continues to deploy capital and support its portfolio companies, its activities will be closely monitored as a key indicator of the health and dynamism of the African private equity sector.
