If we talk about emerging SWFs with a specific focus, we need to talk about MIC, which was established in June 2020 to support and accelerate the economic development of Mauritius, grow national wealth, and build the country’s long-term economic resilience. We had the great pleasure of speaking with CEO Jitendra Bissessur about the fund’s origins and plans.
[GSWF] Could you please walk us through the rationale of process of MIC’s set-up?
[MIC] MIC was set up in June 2020 as an unprecedented measure during an unprecedented time. As a small open economy, Mauritius was highly affected with closure of its national borders, especially for the tourism and export-oriented sectors. The national authorities created MIC to invest in companies that were affected by the crisis, whose impact on the financial stability of the country would have been catastrophic. The investments helped to preserve jobs in these sectors, thus maintaining social stability and cohesion. However, MIC’s mandate is much broader and it aims to support and accelerate the development of Mauritius, encouraging new investments and building long-term resilience for the country.
[GSWF] MIC has deployed over US$ 1 billion in a short span of time – is there enough absorption capacity in Mauritius?
[MIC] Yes, we deployed US$ 1 billion over nearly 3 years of operations, which indicates how the MIC’s Board was swift and proactive given the goal of bailing out affected companies. Most of the investments were done via secured convertible bonds with the appropriate covenants associated to them. The MIC was also called upon to invest in an industry of strategic and national importance, wherein it acquired a 49% stake in Airport Holdings Ltd. This equity participation reflects MIC’s diversified portfolio, geared towards supporting critical infrastructure and promoting Mauritius as an investment destination. Through its astute and timely investments, the MIC contributed to the stability of the domestic financial system and built confidence among economic operators in Mauritius.
[GSWF] How are your three funds (Equity Participation, Future Generations and Infrastructure) structured and governed?
[MIC] We are fully owned by the Central Bank. However, the MIC has a totally independent Board of Directors, with Mr. Mark Florman as Chairman. The investment process is also independent, and we undertake a complete financial and operational due diligence exercise. MIC works with domestic financial experts and has recourse to independent financial analysis from big 4 firms for its physical assets.
[GSWF] Is your intention for MIC to seek international partners and co-investors in the future?
[MIC] Now that Covid-19 is behind us, we are looking at MIC 2.0, including a new strategy and asset allocation, looking at things like supporting the venture capital network or domestic companies trying to invest abroad. The MIC aims to be a catalyzing partner and will build a series of partnerships across the world with both the public and private sector. We are also looking for partners to co-invest.
[GSWF] How important do you think transparency and good governance is, for a domestic investor like MIC?
[MIC] Strong governance, comprehensive oversight and solid leadership are rooted in MIC’s mandate, and we ensure that we abide with international best practices around capital allocation, risk management and corporate governance. We have already published our accounts with the Registrar of Companies in Mauritius and our 2022 annual report is scheduled for release shortly.
[GSWF] What is MIC’s approach to Sustainability investing activities and to ESG in general?
[MIC] We are committed to a new sustainability strategy with a view to achieving net zero over time, critical to the future of tourism and inward investment with Mauritius becoming a leader in green and circular economy. We aim to abide by best practices and monitor our investees’ efforts to deal with ESG. We are working on a Purpose Report, which will show our impact on the country and society at large.
[GSWF] What are MIC’s ambitions going forward?
[MIC] We shall align with Government’s strategy around diversification across several sectors including manufacturing and renewable energy. We would like to strengthen our position as a center of excellence for services within Africa. We would aim to become a lead investor and promote new investments in our country and regionally and a key facilitator of circular economy.
I think after three years in operation, it is safe to say that we have fulfilled our mandate to support the domestic economy and to support employment during the testing times of the pandemic. We will now steer the MIC as a strategic accelerator building sustainable economic development and long-term economic resilience for Mauritius.