Investor appetite will determine the assets the Sovereign Fund of Egypt chooses to acquire for its investment portfolio, the fund’s CEO Ayman Soliman tells Reuters' Patrick Werr. The ongoing sale of a 70% stake in the first of three Siemens / Elsewedy Electric / Orascom Construction combined-cycle power plants is the first example of how the fund will be managing its assets. By keeping the remaining 30% stake for itself, the fund is also signaling that it is “aligned with the investors who come along,” Soliman says. So far, six or seven buyers have alreadyexpressed interest in the transaction, which is expected to be finalized in 2020.

The fund plans to take some of its “cherry-picked” assets to the EGX, which it hopes will give the exchange a boost. “Our three-to-four year plan is to create multiple asset classes that are offloaded to the market. We will enrich the [stock] exchange. We can tag along with a stake, but we will have to list those entities,” Soliman tells the newswire. According to the CEO, the fund is looking to secure a 6-7% yield on the investments it will offer through its portfolio.

By straddling the line between government and the private sector, the fund will be able to “do things differently, unshackled from all those bureaucracies, and improve the way of doing business itself and work with the checks and balances within the government management that investors cannot navigate,” Soliman says.

What’s in the fund’s portfolio so far? The Supply Ministry, for one, has identified 6 mn sqm of unexploited assets owned directly by the ministry or through its affiliated bodies. The Sovereign Fund of Egypt, which currently has a paid-in capital of EGP 1 bn, is also eyeing potential real estate assets, including government-owned buildings in downtown Cairo that will be vacated once the move to the new administrative capital, as well as other options in mining, petrochems, and SME finance. The fund has received seven offers from investors for potential partnerships in healthcare, pharma, and agricultural manufacturing ventures. The fund is also working on drumming up investor interest in the Gulf, and is currently in talks with Oman for cooperation, having already sealed a USD 20 bn investment platform with Abu Dhabi Holding Company.

Tags: