On January 7, 2019, Morocco’s court of audit published an audit of Caisse marocaine de Dépôt et de Gestion (CDG), one of the country’s largest institutional investor.

The audit court criticized the CDG’s investment strategy between 2007 and 2017. The institutional investor is also blamed for having concentrated its investments on a reduced number of shares thus breaking the rule of balanced risk allocation.  

 At the end of 2017, its portfolio estimated at MAD42.2 billion was dominated by nine subsidiaries and shareholdings out of seventy. Those nine subsidiaries concentrate 76% (MAD31.4 billion) of the portfolio’s book value.

This was due to the institution’s resource allocation strategy in the past ten years. About MAD26.8 billion representing 90% of the additional investments made by the institution between 2006 and 2017 were concentrated in eight shareholdings and subsidiaries whose outstanding rose from MAD6 billion to MAD32.7 billion.

Apart from being unbalanced, the profits of CDG’s investments have been on standstill but, the management has not initiated a recovery strategy. Between the period under review, apart from the record 6.64% profit in 2008 and some good performances in 2009 (5.56%) and 2015 (5.62%), the average profit of CDG’s investments has been 4.2%. The profit made by the institution in 2017 (3.31%) was below average, even though it was higher than the 2016 profit.

The audit court also pointed out that some firms in CDG’s portfolio have never paid dividends. At the end of the audit, the audit court formulated some recommendations for governance rules and management objectives.

Idriss Linge