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Egypt-Focused Private Equity Fundraising – November 2015

by Allison Polchinski

  • 30 Nov 2015
  • PE

Preqin’s Funds in Market online service shows that 2015 YTD has been a relatively successful year for the Middle East and North Africa (MENA region) in terms of private equity fundraising, with $4.2bn raised by funds that consider the region for investment. Twelve funds that currently consider investing in the MENA region, either solely or as part of a wider geographic focus, have held a final close this year. This is an increase from 2014, when only nine funds closed collecting $1.6bn, signifying an increase in the region’s fundraising levels. Of the funds closed in 2015 that consider the MENA region for investment, four funds specifically target Egypt; up from only one fund closed in 2014 that specifically targeted Egypt as part of its geographic scope. A notable example of an Egypt-focused fund to close in 2015 is the Duet-CIC Egypt Opportunities Fund, a $300mn buyout vehicle targeting consumer-related businesses.

Of all funds to close that target investments in Egypt, either solely or as part of a wider geographic focus, balanced funds have raised the most capital in the past 10 years. Only two Egypt-focused balanced funds have reached a final close in this time period, but both funds closed on over $1bn; the largest of which was Capital International Private Equity Fund V, a $2.25bn fund closed in 2008 by US-based manager Capital International. Interestingly, there have been more Egypt-focused growth funds closed than any other fund type, with 13 growth funds raising an aggregate $2bn over the past decade.

Although Egypt-focused fundraising has not seen a drastic increase, more funds could be targeting Egypt in the near future, specifically in the renewable energy sector. A 2015 report by the Regional Center for Renewable Energy and Energy Efficiency shows that Egypt is planning to channel more resources into alternative forms of energy, with a goal to ensure 20% of the country’s total power comes from clean methods of energy production by 2020. Egypt’s focus on energy reform will likely attract outside investment, as well as Egyptian capital, in the form of infrastructure and energy-related funds looking to invest in solar and wind energy projects.

There are eight funds currently raising capital which state Egypt as part of their geographic focus, targeting an aggregate $2.3bn. This highlights that fund managers have confidence in their ability to raise capital for investments in the region, despite the undesirable economic consequences of political unrest in Egypt and the surrounding region over recent years.

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