In early October, Bpifrance and its partner Proparco launched their fourth fund of funds for Africa, called Averroès Africa. With a target size of 100 million euros, this fund - which is part of France's investments in Africa announced by President Emmanuel Macron in Ouagadougou in 2018 - has just completed its first closing at 50 millions of euros. In this interview with La Tribune Afrique, Isabelle Bébéar, Director of International and European Affairs at Bpifrance tells us a little more about this new investment structure and details the strategy of the French public investment bank in these delicate times in Africa. , where a certain instability characterizes several potential target markets for these investments.

La Tribune Afrique - What is different about the Averroès Africa strategy that you are launching, compared to the funds that preceded it? Isabelle Bébéar - Our investment strategy has evolved with the African market. We started investing in North Africa in 2002, as it was the most developed sub-region of the continent in terms of private equity. We have that with a third fund. It was by launching the third fund, Averroès Finance III, that we decided to broaden our investment thesis to all of Africa, while investing only in multi-sector and pan-African funds. But we have remained in 40 countries and have also started to invest in venture capital, of which Averroès Finance III has five funds. We maintain the same investment thesis for the fourth fund [Averroès IV], the target size of which is €100 million and which is part of the €1 billion investment envelope in Africa announced by the President. Emmanuel Macron in 2018. We invest tickets of 5 to 15 million euros in each fund with an opening in the 54 countries of the continent. Overall, At least 70% of the fund will be used to invest in growth capital, multi-sector and pan-African funds. But given the evolution of the African market, we plan to invest up to 30% of the fund in venture capital funds and/or sector funds. What are the objectives of Averroès Africa? We pursue three main objectives with these funds. Of course, we want to achieve financial performance at market level, but we also want our investments to contribute to the sustainable and inclusive economic development of African countries, that they therefore integrate ESG criteria [Environment, Society and Governance, editor's note] and that the teams in which we are going to invest have the best market practices. The third objective, which moreover represents an opportunity for everyone, consists in putting the African companies in these portfolios in contact with the French companies that are Bpifrance customers, on the basis of the principle that it is important to be able to meet a reliable partner, to grow in Africa. And conversely of course, this also represents an opportunity for these African companies to find partners in France and in Europe, including even for external growth. So we absolutely have this idea of promoting exchanges between the two continents. This new fund of funds targets startups and SMEs. But what are your favorite sectors? We wish to study three sectors in particular, namely health, financial services and agribusiness. These are sectors that have sufficient market depth for African investment funds. It is in these sectors that he is starting to have enough investment teams, and these are very buoyant sectors on the continent. It is also for these reasons that there are more and more teams and structures investing in these three sectors. The reasoning is the same for venture capital funds that have been developing for several years on the African continent. Of the target 100 million euros, Bpifrance raised 50 million with its partner Proparco. Can we expect to see African investors at the next closing? We are in discussion with international investors to complement and we are open to having pan-African investors. The African continent is a continent that we explore on this subject. We do not despair of finding an African investor. You started in North Africa before branching out to the rest of the continent. What about the Central African region which we hear little about? Is it gaining momentum in your sub-regional targets? It is true that so far, Central Africa is far from being the region where private equity is the most active. On the contrary. One of the reasons for this delay, in my opinion, lies in the structure of the business fabric, which is more a fabric of VSEs and small SMEs. These can host small national investment funds. However, VSEs are not the main target of investment funds, but rather start-ups, SMEs and high-growth SMIs. It is extremely beneficial for the countries, but it is true that it is not the best tool for VSEs which work more with other mechanisms such as microfinance institutions, honorary loan funds, etc. .. There are investment funds being created in Central Africa, but they are often national funds and unfortunately there are not many of them. Africa, like the whole world, is experiencing an unprecedented economic context following the health crisis. What impact has the pandemic had on Bpifrance's strategy in Africa? Over the past few months, we have spoken a lot with the fund managers in which we have invested who, too, have spent a lot of time talking to companies to find ways to better respond to this crisis. We have also worked hard with our funds to give them more leeway so they can support the companies in their portfolios. It is true that Africa is economically affected by the Covid-19 crisis, but we believe that there are sectors that are holding up well and that now is the time to invest in Africa. So we continued our momentum. It is certain that with this crisis, the way in which the management teams reacted and were able to support the companies in their portfolios will be important for us, when we carry out the operational due diligence on the funds. This will be part of the criteria. But I believe that those teams that have come through the crisis have come out of it even stronger. The pandemic has therefore not really had an impact on our strategy. We haven't changed anything. We still believe in the development of Africa in the interest that the continent represents for French companies. Our goal is to invest in experienced teams, capable of resisting, and even of investing in sectors that are buoyant following this crisis. What is your view of the situation in West Africa, which is a very dynamic region economically and promising in terms of investment capital, but which has for some time been experiencing a rise in instability, particularly in Mali, in Ivory Coast, in Guinea...? We are very attentive to what is happening there. In fact, these are crises that are not new in Africa, where we have been investing for 18 years. We are therefore aware of these realities. Our strategy has evolved in the sense that we invest in funds established in several African countries, which invest in multi-country companies, which are therefore not only in one market and which are multi-sectoral. It is precisely to limit this risk. Thus, a company established in four countries will not be totally in difficulty if one of these countries goes through a crisis. The distribution of risks is really our key idea at this level. On the macroeconomic and democratic level, things are getting much better in some African countries, but in many others the situation remains quite unstable and Bpifrance's investment strategy is adapting to this type of risk. The issue of parity goes back a long way. Do you focus on women-led businesses among your investment targets? At Bpifrance in general, in our funds of funds activity, we are very attentive to this. We participated in the development of France Invest's gender diversity charter. And parity is part of one of the due diligence chapters that we apply to funds, whether French or African. This is a point to which we are attentive. We look at parity both in the investment teams, including the partners, and in the companies that have benefited from the investments of these teams. On the other hand, you should know that even if there are women in some teams, it is actually a very masculine world. The objective is therefore not, for the moment, not to invest in a fund because the team is exclusively male, but rather to set them objectives for change. In addition to that, we include this criterion in the reports that we ask them for during the year. The particular economic context of Africa does not only invoke the pandemic, but also the entry into force of Zlecaf. How do you see this next configuration of African markets, particularly with the new Averroès Africa fund? Given that we will not make direct investments and that we are intermediated by funds, the Zlecaf is rather good news. It's true that the fund teams will perhaps have a little less difficult job. Because, I want to emphasize that what these funds do is absolutely difficult and I think that private equity is even more difficult in Africa than in Europe, because of the legislation which is not always adapted. In my opinion, the Zlecaf will make things easier and will make business growth easier and certainly investments and disinvestments easier. Everything that goes in the direction of simplifying business -while having rules so that there are no overflows, including unions between countries to facilitate the work of entrepreneurs and investment funds- converges with our vision. Overall Bpifrance is therefore optimistic for investment activity in Africa in 2021? Absolutely. We see which companies are resilient. We will be able to support these companies which have strong prospects with perhaps lower valuations at entry, but for us, it is absolutely the time to invest in private equity in Africa. Interview by Ristel Tchounand.