The Africa Report
By Nicholas Norbrook

Sand dune

When it comes to the great global migrations of capital, Africa sits on the sidelines. But Morocco’s Wessal capital is going against all odds.

Apart from a few large resource deals, it is hard to tap institutional investors – including pension, mutual and hedge funds – because these investment behemoths need large enough projects to get economies of scale.

After the Guggenheim was built in Bilbao [in Spain], the price of residential property went up 500% in five years.

In Morocco, Wessal capital attempts to sidestep this by lowering transaction costs such as due diligence and creating local legal structures and by providing big-ticket projects.

Wessal has brought in Aabar investments from the United Arab Emirates, the Kuwait Investment Authority, Qatar Holding, the Saudi Public Investment Fund and the Fonds Marocain de Développement Touristique (FMDT) into a $2.5bn co-investment vehicle, the continent’s largest joint sovereign wealth fund.

“It creates a platform for asset management that really puts Morocco on the map for institutional investors,” says Tarik Senhaji, an investment banker and CEO of the FMDT, who represents the Moroccan government on the board of Wessal capital.

The first projects in the pipeline are an overhaul of the casablanca port area for €534m ($704m) and the Bouregreg Valley commercial and residential real estate development project in Rabat, which is set to cost €774m.

How will investors make their money? Property. “After the Guggenheim was built in Bilbao [in Spain], the price of residential property went up 500% in five years, and tourist arrivals went up sixfold,” says Senhaji.

Wessal also fits Morocco’s aim to weave together public and private initiatives. Drawing heavyweight tourism investors de-risks the country for others, wooing funds not just for Morocco but for the rest of Africa.