AlterMed, the new fund for SMEs unlisted on the Stock Exchange

The Mediterranean basin is the new land of opportunities for the investment capital market, and one that businesses should jump at, especially growing SMEs in this area. In this respect, the association of the European Investment Bank (EIB) with the help of the Facilité Euro Méditerranée d’Investissement et de Partenariat (FEMIP), the Caisse d’Epargne Provence Alpes Corse and all their partners are tapping into these rosy prospects, to the benefit of all these territories.

On December 13, 2007, the above companies launched an investment capital fund dedicated to SMEs in the Mediterranean basin, “AlterMed”: a financing project of which they are the founders and subscribers. The management of this fund, designed to support SMEs financially in their development projects in Algeria, Morocco, Tunisia, Turkey and Egypt, was given to the firm “Viveris Management”.  
The priority outside Europe now focuses on the Mediterranean, after far too long a period of neglect. This new interest is all the more significant as it already involves over 27 funds representing €143 million, while supported by a large network of companies offering a good yield target for these funds.

A growing market for investment

This enthusiasm is the result of a clear acknowledgement: the Mediterranean market is in full growth, and is in fact becoming a competitive economic area vital to Europe’s development and which remains to be conquered. Keen to preserve a stable and healthy environment achieved through the deregulation of markets, goods and services, and the boom in private investments, these countries, whose recent dynamics make them highly attractive, are opening wide the door to SMEs, the primary players in this proactive trend which will ensure growth, employment and training. It is in this productive context that the “AlterMed Fonds Commun de Placements à Risques” (Venture Capital Trust) steps forward. This Fund is dedicated to SMEs that have decided to work and develop in Algeria, Morocco, Tunisia, Turkey and Egypt. With a global amount of €75 million, “AlterMed” is the minority shareholder in the capital of companies that have been selected based on well defined criteria. The amounts will be allocated using an approach of assistance and support to SMEs wishing to start up development operations covered by this financing program. This first mutual Fund is divided into three specific subdivisions, located in the Maghreb: Morocco, Tunisia and perhaps Algeria. This will be covered by AlterMed Maghreb, and in Turkey by AlterMed and the Alternative Private Equity Fund, which is associated in this venture; they will act together under the name AlterMed Turkey. This operation brings together potentials designed to be perfectly in line with this market, through an investment strategy defined by geographic confinement, and a financial offer based on the different segments composing the fund.

The compartments in detail

To be more accurate, AlterMed APEF represents €30 million in investment for a number of businesses varying between 15 and 18; the aim is to raise 75% in development capital and 25% in LBO. AlterMed Maghreb represents an investment of €20 million, with a portfolio of 12 to 15 businesses and an objective of 40% in development capital and 60% in LBO. And finally, AlterMed Turkey represents financing of €20 million for 9 to 12 SMEs with an objective of 50% in development capital and 50% in LBO. The investment strategy aims to obtain 40 participations for a global objective of €75 million. In order to establish AlterMed as a proximity investment fund, a competence transfer system has been set up with the help of local players and management firms adapted to the specifics of each market, which explains why a network of investment teams has been set up in Rabat, Tunis and Istanbul.

 

Subscribers and founding partners of AlterMed

The firm Viveris Management and the EIB, which invested €11 million in the AlterMed Maghreb and Tunisian compartments, are instrumental in this project as subscribers and founding partners of the Fund. The IFC is considering investing up to €11 million in both these compartments.
As the manager of funds amounting to €400 million, Viveris Management, a partner of the Caisse d’Epargne group, is one of the primary French fund managers of investment funds focusing on unlisted SMEs. This firm operates on the major segments of the investment capital market: technology risk capital, development capital and transmission/LBO capital. Several investment sectors including funds calling on savings (Mutual funds and local investment funds) and those aimed at qualified investors (VCTs) have been set up. In the regions concerned, partnerships are being set up to support the building of the Fund. In Morocco, the Banque Centrale Populaire, the Mutuelle Agricole Marocaine d’Assurances and the Banque Marocaine pour le Commerce et l’Industrie are investing in the country and in the set-up of the Fund investment team in Rabat: Viveris Istithmar. AlterMed is focusing on Alternative Capital Partners in Tunisia with a network that includes local professionals. In Turkey and Egypt, associations with local partners in investment capital are ongoing.
And to crown it all, the United Nations Organization for Industrial Development is proposing to make available its human resources present in the Mediterranean basin.