Egypt's Ezdehar considers launching two funds for debt instruments, SMEs

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Cairo - Emad Barsoum, the Founder and Managing Director of the private equity fund manager Ezdehar, revealed that his company finalised the investment map of its Ezdehar Mid-Cap Fund II until 2025, amounting to $175m.

He added that the company currently considers three investment opportunities, one of which is expected to materialise before the end of this year, following its majority stake acquisition in supermarket chain Zahran Market.

Barsoum told Daily News Egypt that the Ezdehar Mid-Cap Fund exited from two companies over the past few months, and set a programme to exit from all the five companies where the fund is currently investing by the second half of 2023 until 2025. The companies are Egyptalum, Al-Tayseer Group, Rich Food, Family Group, and Eagle.

He revealed that the company will consider launching a fund for debt instruments and another for small and medium enterprises (SMEs) in 2023. They will possibly be launched in 2024.

With the efforts the Egyptian leadership and the government makes to encourage foreign and local investment, Barsoum said that Egypt is able to attract foreign investments, but it is necessary to solve local problems related to investment, especially the dollar liquidity crisis, in order to complete the investment and exit cycle for foreign investors. He stressed that foreign investors usually look at the dollar liquidity in the country to ensure the flow of dividends and ease of exit.

He also pointed out the importance of the clarity of the state’s investment role in specific sectors, to achieve competitive neutrality. He pointed out that it is necessary to make it clear which sectors the state will exit from.

He added that Egypt is suffering from an import crisis, which affects a large number of economic activities. He stressed the importance of providing solutions to get out of the crisis.

As for the sectors that enjoy great investment opportunities, it is the field of manufacturing, especially in all sectors that replace imports with “import substitution,” pointing out the need to establish greater advantages for companies that will work in those sectors.

He added that the tourism sector is one of the most important and promising sectors in Egypt, but the whole system must be equipped with providing low-cost flight programs, allowing travel to and from Egypt at good prices that replace the current relatively high prices.

He stressed that Egypt can increase the number of tourists by a fivefold, through an integrated plan from the aviation sector, to develop tourist facilities.

He explained that Egypt can be a top destination of tourism globally with its attractive elements that must be optimally exploited to also attract investments to this vital sector.

He also pointed out that international development institutions are ready all the time to invest. Barousm pointed out the need for the success of their current investments in Egypt, which helps to attract foreign direct investment (FDI) directly to the Egyptian market, explaining that time for foreign investors equals money, so it is necessary to overcome obstacles to licensing, and to try to shorten the duration required for procedures.