FONSIS invests in equity and quasi-equity in projects with high potential for economic growth, wealth and jobs creation.
Projects can vary in size, ranging from SMEs to large structuring flagship government projects. Furthermore, pursuant to Law n°2012-34 based on which FONSIS was created, FONSIS shall dedicate up to 20% of its resources to a Private Equity Sub-fund targeting local SMEs (the SME Sub-fund).
FONSIS invests primarily in strategic sectors defined in the Plan Senegal Emergent (PSE), namely:
- Logistics and industrial hubs;
- Social housing;
- Mining; and
- Services: IT, education, health, business parks and tourism.
Unlike traditional Private Equity funds that seek Internal Rates of Return (IRR) between 20 and 25%, FONSIS will seek to reach a minimum net IRR of 12% from its investments.
In line with its investment strategy, FONSIS is expected to fulfill three main roles:
- “FONSIS Developer”: Develop and structure strategic projects from scratch by finding financial and technical partners by way of fully transparent requests for proposal and calls to tender;
- “FONSIS Co-investor”: Invest in ad-hoc proposals received from entrepreneurs, investors, technical and financial partners;
- “FONSIS Restructurer”: Restructure, where required, and optimize State-owned assets received as part of its share capital.
As a Co-investor, FONSIS supports project developers throughout an investment horizon defined and agreed upon with the project participants prior to the investment. Depending on the nature of the project and the relevant sector, the investment horizon can vary from five (5) to twelve (12) years. Exits are realized through one of the following:
- A Put option to the project developers;
- A sale to a strategic partner (with the promotion of the local private sector as a priority);
- An Initial Public Offering (IPO)