AfricInvest and Bpifrance have launched the first cross-border investment fund dedicated to the development of small and medium-sized enterprises (SMEs) in both Africa and France.

The French African Fund (FAF) will be managed by AfricInvest, a pan-African mid-cap-focused private equity firm with almost €1bn of funds under management and offices in six African countries as well as in France.

Aziz Mebarek, one of AfricInvest’s founding partners, said: “AfricInvest looks forward to supporting the ambitions of the FFA through its diverse and multidisciplinary team, while bringing French and African entrepreneurs strong support to push their respective projects beyond the boundaries of their countries and continents.”

The Fund’s strategy is to invest in mid-cap companies with significant growth potential, using an entrepreneurial medium- to long-term approach to value creation. 

In addition to providing financial support, AfricInvest will accompany the French firms in their strategic development in Africa, and conversely, will assist African companies with their expansion into France and the European continent.

AfricInvest aims to support investee companies—through its experience, financing capabilities, extensive network and the expertise of its teams in France and Africa—in an effort to help them accelerate their growth and access new markets. 

It will also look to facilitate partnerships with the relevant commercial, financial, industrial and technological partners in each market.

The FFA will invest half of its capital in French SMEs looking towards Africa for growth opportunities. 

The investments will take the form of equity participation, generally through minority stakes. 

The other half of the Fund’s capital will be invested in African SMEs with strong potential to grow into regional champions.

In addition to financial returns, the Fund will focus on the impact of its investments on companies’ governance, transparency, employment creation and respect for social and environments values.

Ann Wyman, Senior Manager at AfricInvest, said that the Fund held its first and final close at €77m.

“The fund will look at deals in a wide range of sectors including (but not limited to) ICT, health, education, agribusiness, manufacturing (mechanical and electronics), transport and logistics, tourism and leisure, financial sector and fintech, as well as renewable energy and cleantech,” she told Africa Global Funds.

“For the French pocket of the Fund, the ticket size will be on the order of €5-8m per investment, and for the African pocket of the Fund, the investment size will be €15-30m,” she added.

A pool of diverse investors have subscribed to the Fund, all with the vision of accelerating the growth of African and French SMEs through development projects across the two continents. 

These investors include Bpifrance, two French private-sector groups—Société Générale and Orange, and Proparco (the AFD group). 

In addition, more than 25% of the fund’s subscription comes from African investors, including the Caisse Nationale de Prévoyance Sociale de Côte d’Ivoire (CNPS); the Moroccan insurance company Saham; the Moroccan industrial and financial group Financecom; the Central Bank of Kenya Pension Fund; private investors from Kenya and Nigeria, as well as AfricInvest itself.

Benjamin Paternot, Bpifrance’s Fund of Funds Executive Director, said: “The cornerstone of the strategy for the French African Fund rests in AfricInvest’s ability to help French companies grow in Africa, and at the same time attract African companies to the French market.” 

“The quality of AfricInvest’s experience—through its diverse team based in France and  across Africa—as the well as the development potential of the African continent, have together attracted the highest quality partners in the private sector both in France and in Africa,” he said.