SPE PRIVATE EQUITY FUND III

Promoter – Financial Intermediary

SPE CAPITAL PARTNERS LTD

Location

• Mediterranean Countries

Description

The operation consists of an equity participation in SPE Private Equity Fund III, a generalist private equity fund targeting growth capital investments predominantly in private small and medium-sized enterprises (SMEs) in North Africa.

Additionality and Impact

SPE Private Equity Fund III, a generalist private equity fund targeting growth capital investments predominantly in small and medium-sized private companies located in North Africa. Through this operation, the EIB will be able to continue to support the growth and institutionalisation of an independent and well-reputed fund manager investing primarily in North Africa. Furthermore, the EIB will provide much needed equity risk capital to local enterprises that operate across various economic sectors. Access to finance - in particular equity finance - and managerial advice are among the most prevalent barriers for the growth of small and mid-sized companies. The provision of growth capital and managerial support through private equity funds has proven an effective strategy to overcome this market failure. Additionally, the EIB has played an important role throughout the Fund Manager's history and supported the team to become independent. The EIB's commitment as part of the Fund's first closing is anticipated to support the fund raising and catalyse other investors in a difficult fund-raising environment. The EIB is expecting to continue to provide guidance to the Fund Manager on best market practice for international private equity firms and thus contribute further to its institutionalisation. The proposed operation is consistent with EU policy as articulated in the new agenda for the Mediterranean. Specifically, Flagship 5 "Connected economies", foresees the financing of Micro, Small and Medium Enterprise (MSME).

Objectives

The aim is to support the development of the private sector, primarily in North Africa, by increasing access to risk capital for local SMEs. The fund is the successor fund of Africa Industrialization Fund (AIF), in which the EIB invested in 2018. The new fund will pursue a similar strategy. SPE Private Equity Fund III will seek to build a diversified portfolio and leverage on the strong team's knowledge and experience. The fund manager will aim to create value through a hands-on management approach, driving the growth and profitability of investee companies as well as enhancing the Environmental, Social and Governance (ESG) standards.

Sector(s)

• Services - Financial and insurance activities

Proposed EIB finance (Approximate amount)

USD 9 million (EUR 9 million)

Total cost (Approximate amount)

USD 350 million (EUR 329 million)

Environmental aspects

The fund will operate in line with the EIB's environmental and social standards.

Procurement

N/A

Status

Signed - 14/02/2024