Egypt - Catalyst Partners has embarked on an ambitious plan that primarily focuses on supporting small, medium, and family businesses. Additionally, they are expanding into non-banking financial activities by creating a model that integrates investment banking with the specific requirements of startups and entrepreneurs. This approach aims to provide non-traditional financial services that align with the developments observed in startups both locally and regionally.

Abdel Aziz Abdel Nabi, the company’s executive director, highlighted four main activities that Catalyst Partners is currently emphasizing:

  • Promotion and subscription coverage activities
  • Direct investment
  • Asset management
  • Non-banking financial activities

Their focus is on serving small and medium enterprises, transforming them into robust institutions. To achieve this, Catalyst Partners collaborates with local and international institutions through targeted partnerships. The ultimate goal is to provide impactful capital for companies operating in Egypt.

Abdel Nabi revealed that the promotion sector is actively providing consultations for over 10 deals, including mergers and acquisitions. These deals benefit financial institutions and span vital sectors such as food, logistics, and construction, with a combined value of approximately EGP 2.5bn.

The success of these deals is closely tied to recent reform decisions made by the government and the central bank.

Looking ahead, Catalyst Partners aims to maximize its direct investment portfolio, which currently stands at around EGP 400m. By the beginning of 2025, they aspire to reach a portfolio value of EGP 1bn.

The company is also exploring investments in defence-related sectors, particularly those influenced by population density. Currently, they are studying the possibility of injecting new investments of up to EGP 250m into three small and medium-sized companies operating in the food, healthcare, and logistics sectors.

Abdel Nabi emphasized the imminent completion of two deals, including the acquisition of a pharmaceutical company, which is expected to close in the current quarter.

Furthermore, Catalyst Partners actively seeks strong acquisition opportunities in vital sectors. Their subsidiary fund, CCIA, acquires influential minority stakes in three companies across different sectors.

When it comes to investment decisions, the company adheres to specific criteria related to governance, investment strategies, and effective growth. Their focus remains on defence sectors that remain resilient even during crises.

Abdel Nabi summarised his role: “While increasing sales is important, my primary responsibility is to enhance investment levels systematically, resulting in greater returns.”

Notably, the CCIA fund, owned by Catalyst Capital Egypt, represents the first influential investment fund in Egypt and the Middle East. In collaboration with the United Nations Development Program in Egypt, they invested EGP 100m in the Alexandria for Industrial Development (AID) company.

In March 2022, Catalyst Partners launched this influential investment fund, committed to driving positive change and advancing the United Nations’ sustainable goals through strategic investments. Their portfolio includes commitments from major state-owned financial institutions in Egypt. Additionally, they collaborate with the United Nations Development Program to assess the social and environmental impact of their portfolio companies.

Contributors to the fund include Misr Insurance Holding Company, Misr Life Insurance Company, Misr Insurance Company, Post Investment Company, Misr Finance and Investment Fund, Banque du Caire, Commercial International Bank, Fawry Bank, United Bank, Suez Canal Bank, and Baraka Bank.

In terms of promotion and subscription coverage, the CCIA fund aims to enhance impactful investment in Egypt as a key means to achieve the sustainable development goals included in the national development plan. This endeavour aligns with the principles and standards set forth by the United Nations Development Program for Sustainable Development Goals (SDGs), specifically focusing on SDG seventeen for the private sector by 2030.

The fund strategically targets investment in small and medium-sized companies, adhering to the criteria defined by the Central Bank of Egypt for this category of enterprises.

Abdel Nabi further elaborated that the Alexandria for Industrial Development Company, which the CCIA fund has invested in, is actively working to attract foreign investment within the Suez Canal Economic Zone. Their goal is to acquire 440,000 square meters of industrial land from the Chinese TEDA company.

He confirmed that the expected investment size to be attracted falls within the range of $110m to $120m. The Chinese company will provide the necessary infrastructure, while the Alexandria for Industrial Development Company has already completed the sale of 25% of the land (approximately 100,000 square meters). The remaining sales operations are scheduled to conclude over the next three years.

Abdel Nabi emphasized that this step is particularly significant given the recent financial inflows and exchange rate liberalization. It addresses an abnormal pricing situation that had previously disrupted merger and acquisition deals in the market.

He stressed the importance of Egypt’s focus on companies that can substitute imports, as this approach creates a substantial gateway for attracting foreign currency. Additionally, he highlighted the necessity of fostering an investment-friendly climate for companies operating in the country.

Regarding the non-banking financial activities sector, Abdel Nabi revealed that his company aims to expand its leasing portfolio. Currently valued at approximately $30m, they aspire to reach $45m by the end of 2024.

Furthermore, there is growing interest in investing in metal funds, particularly gold investment funds. Expectations are high for establishing additional funds during the coming period.

Catalyst diligently manages the pricing of investment documents across the three funds, assessing them daily based on subscription and trading rates.

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