Tanmiya Capital Ventures (TCV) is looking to deploy roughly USD 100 mn over the next two to three years, Managing Partner Mohamed Mahgoub (Linkedin) tells EnterpriseAM. Following the USD 130 mn close of its second fund in December 2024, the PE firm has already notched two plays and is hunting for four more mid-cap successes.

Things TCV looks at before investing

TCV applies “four filters” to invest in mid-cap companies — sector positioning, competitive advantage within the sector, management quality and alignment, and exit visibility. “The keyword that we always use with founders before investment is alignment,” he said. Current focus areas include food and beverage, FMCG, manufacturing, education, and select pharma plays.

Growth, not rescue: “We don’t do turnarounds,” Mahgoub says. The firm is sticking to its mandate of taking minority stakes in companies that already have the infrastructure and governance to scale. Their current hit list includes F&B, FMCG, manufacturing, higher education, and pharma.

Case study #1: Mahgoub said TCV’s investment in COPAD was driven by structural positioning rather than short-term advantage. More than “70% of their portfolio is flexibly priced,” he said, meaning a large portion of products falls under the National Food Safety Authority framework rather than the stricter drug-pricing regime of the Egyptian Drug Authority. That pricing flexibility, he explained, is critical in a market that has seen multiple currency devaluations and input-cost pressures.

Another key filter was limited exposure to government procurement cycles. “One of the main criteria we are looking at is small exposure or no exposure to public tenders,” he said, noting that delayed state payments can strain pharma manufacturers. COPAD also stands out as one of the largest and most organized family-owned pharma players in its segment, with a portfolio diversified across categories and positioned to replace smaller multinational players exiting the market. For TCV, the investment combined scale, pricing resilience, brand strength, and institutional capacity — all essential ingredients in a minority growth strategy.

Case study #2: On the topic of its Al Abd Patisserie investment, Mahgoub explained how TCV filters for scale, brand strength, and institutional capacity before investing. The company had “around 12 branches when we ventured into the business. There are now around 60 branches, heading towards 70,” he said. Beyond footprint, the brand has been in the market since 1974 and competes across “more than nine product categories,” giving it diversification and strong nationwide brand equity.

Operationally, Mahgoub highlighted infrastructure as a differentiator. The company has a robust supply chain, an engineering team capable of opening “a branch in eight weeks,” and is building what he described as the largest factory in its segment at roughly 45k sqm. For TCV, these are precisely the attributes it seeks — scale, institutional organization, strong management, and the capacity to grow in a structured, exit-ready way.

What LPs want to see in domestic family-run businesses

Mahgoub outlined a two-step transformation process that he believes ultimately draws foreign institutional investors into Egyptian companies. For foreign and regional investors, he stressed, two elements matter most:

#1- Infrastructure and governance. This is achieved through introducing structured decision-making, clear reporting lines, defined responsibilities between management, the board, and shareholders, and institutional processes that replace informal, family-style decision-making. “The first and biggest transformation,” he said, is helping founders understand what it takes to have an institutional partner on the cap table — from governance to transparency.

#2- Credible, well-articulated growth. He explained that international institutions look for scale, clarity of strategy, and the ability to deploy capital behind the fastest-growing verticals with discipline rather than emotion.

Exit routes

On exits, Mahgoub said optionality has improved markedly over the past year. Historically, trade sales and secondary sales to larger regional private equity funds were the more visible routes, but “I think the public market has opened again,” he said, pointing to renewed foreign participation on the EGX and stronger aftermarket activity. The return of international institutional investors, he stressed, is critical.

“The comeback of international institutional investors was the gateway,” he said, noting that they are typically the largest ticket buyers and the most active in the aftermarket, often holding positions for three to five years. With Egypt being “one of the cheapest markets globally” and reform momentum continuing, IPOs are once again a viable exit path alongside sales to strategic investors from Saudi Arabia and the UAE and to larger regional or Africa-focused funds increasing allocations to Egypt.

That said, timing remains disciplined. “You do not go for a liquidity event when you achieve 100%… [and] you do not go for a liquidity event when you achieve 40% of your value creation,” Mahgoub said. Instead, TCV looks for a “sweet spot” — roughly 60-65% of targeted value creation achieved — leaving meaningful upside for the next investor.

The chosen route also depends on the founders’ ambitions: Some prefer IPOs to retain operational autonomy, while others seeking regional expansion may opt for a strategic partner. “It depends on the story,” he said, emphasizing that alignment with management ultimately determines the exit path.

The missing piece? Local funds

While IFIs remain the bedrock of Egyptian PE, Mahgoub argues the ecosystem won’t mature until local pension funds and insurers step up. “IFI investment should be a catalyst […] it cannot be the vast majority,” he says. For the private market to truly evolve, domestic institutional capital needs to follow the lead of the internationals.

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