Spring 2020 Issue
balance sheet, the French Caisse de Dépôts et Consignations (CDC) is one of France’s largest institutional investor. Sister institutions also exist in Italy, Brazil, Portugal, Belgium and Quebec. In Africa, eight caisses are operating: Caisse de Dépôt et de Gestion of Morocco (1959), Caisse de Dépôts et de Consignations of Senegal (2006), Caisse des Dépôts et de Consignations of Gabon (2010), Caisse des Dépôts et de Développement of Mauritania (2010), Caisse des Dépôts et de Consignations of Tunisia (2011), Caisse des Dépôts et Consignations of Niger (2017), Caisse des Dépôts et Consignations of Burkina-Faso (2018), and Caisse des Dépôts et Consignations of Côte d'Ivoire (2019). Cameroon, Chad, Togo, Benin, Congo and Equatorial Guinea have plans to create similar institutions. Within the WAEMU region, it is expected that six out of the eight countries will have a Caisse de Dépôts by 2020. Depending on the country and capacity, resources come from regulated savings funds, guarantees and other deposits, as well as from pension and/or notarial funds and public reserves. The institution acts as both a sovereign fund and a development bank, and even as a commercial bank to finance certain projects. The fundamental characteristic that distinguishes a Caisse de Dépôts from another public or private financial institution is that it collects and manages regulated financial resources, whether mandatory or voluntary. A caisse then allocates these resources to sectors that are poorly served
by the market, or to national public-interest projects, sectors where private actors lack the capacity or mandate to invest. Like pension funds, insurance companies and SWFs, caisses are vectors for allocating savings to growth-bearing projects. It should be noted that a caisse holds a different approach as it primarily aims to support the economic and social development of its country of origin. The institution’s economic model serves a dual purpose: as a guarantor of the savings it is responsible for, and as a long-term investor to bolster a country’s economic and social development. The operating model of a Caisse des Dépôts allows for a different strategy from most market players. The common denominator of these institutions is their high level of equity capital and a low proportion of liabilities due in the shortterm, which allows them to partially overcome the constraints related to short-term asset price volatility and to develop a long-term investment strategy. They are able to invest more in illiquid assets, in areas suffering from financing shortfalls such as infrastructure, housing, SME development, or renewable energy and to focus on public-interest projects. By the same token, some have developed additional specialties such as tourism, territorial engineering or digital technology. The public and independent nature of a caisse allows it to complement other actors in the CFI.co | Capital Finance International
financial system. These institutions generally have equity capital well above average, from earnings accumulated over the years. They are subject to strict management standards, which allows them easy access to financial markets. For a country, the operating model of a Caisse de Dépôts offers advantages for industrial and social development. In Morocco and Tunisia, with consolidated balance sheets of €22.9bn and €2.2bn respectively in 2018, caisses de dépôts play an important role in national priorities. In sub-Saharan African countries, balance sheet sizes vary depending on the seniority of each caisse and the strength of each country’s economy. The model’s development is more recent in this region, and thus the financial capacity of caisses is more limited than in North Africa. A Caisse de Dépôts pools funds from various sources for investment purposes only. The establishment and sustainability of the domestic resource collection mechanism is a long and complex process that requires federating the synergies of targeted actors (banks, pension funds, public institutions). The volume of funds raised depends on the operational capacity of these actors and the vitality of the environment in which they operate. As these are public and private operators, the challenges are numerous and the processes, lengthy. In Morocco, a significant share of resources comes from the management of 115