{"id":582324,"date":"2023-03-07T00:00:00","date_gmt":"2023-03-07T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2023\/03\/07\/sfe-head-ayman-soliman-talks-privatization-at-efg-hermes-one-on-one-conference\/"},"modified":"2023-03-07T00:00:00","modified_gmt":"2023-03-07T00:00:00","slug":"sfe-head-ayman-soliman-talks-privatization-at-efg-hermes-one-on-one-conference","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2023\/03\/07\/sfe-head-ayman-soliman-talks-privatization-at-efg-hermes-one-on-one-conference\/","title":{"rendered":"SFE head Ayman Soliman talks privatization at EFG Hermes\u2019 One-on-One conference"},"content":{"rendered":"

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<\/span>EFG Hermes Group CEO Karim Awad kicked off the group\u2019s <\/span>One-on-One Conferenc<\/span>e in <\/span>Dubai this morning<\/span>,<\/span> <\/span>welcoming 179 companies as well as 561 global institutional investors and fund managers to explore key investment opportunities across frontier and emerging marke<\/span>ts.<\/span> The <\/span>conference (pdf)<\/a><\/span>, headlined \u201cOutplaying Challenges,\u201d<\/span> runs until 9 March.<\/span><\/p>\n

Sovereign Fund of Egypt (SFE) CEO Ayman Soliman took to the One-on-One stage <\/span>yesterday morning <\/span>to talk about the fund\u2019s approach, which sectors its eyeing, where its pre-IPO fund fits into the government\u2019s privatization plans, and how the depreciation of the EGP impacts potential investors. <\/span><\/p>\n

\u201cEgypt is a two-sided economy,\u201d<\/span> Soliman told attendees. The SFE is targeting both of those <\/span>sides \u2014 \u201cthe old that needs to be rethought, which includes the agriculture, tourism, and services sectors, as well as any consumer-driven sectors,\u201d as well as fast-growing new sectors like tech, renewables, and the green economy. \u201cOur ethos is to create avenues for capital to flow into key sectors,\u201d he said. <\/span><\/p>\n

Key sectors for the SFE: <\/span>\u201cFor us, key growth comes from food, healthcare, logistics and <\/span>supply chain management, or sectors where labor arbitrage is beneficial,\u201d Soliman said. He also namechecked export-oriented businesses and those that have proven resilient against the currency devaluations. <\/span><\/p>\n

The SFE\u2019s pre-IPO fund gives state firms a chance to raise capital in challenging <\/span>conditions: <\/span>\u201cGlobal equity markets are challenging and given the current devaluation, equities are becoming difficult to price,\u201d Soliman said. \u201cThis unlocked an opportunity for us to bring in strategic anchor partners that add value to the companies that need capitalization that is not abundant in the local market.\u201d <\/span><\/p>\n

Strategics bring expertise, which brings growth: <\/span>\u201cOur process for the pre-IPO fund entails <\/span>carefully selecting companies that have the right growth profile and the right management talent, but don\u2019t have the right know-how or bandwidth to grow outside Egypt or tackle their next M&A. We bring in strategic partners who see these opportunities, and once that partnership is forged, the company goes to market at multiples of its valuation, which is [good] for investors, the partner, and the company. It\u2019s a two-way value-creation cycle.\u201d<\/span><\/p>\n

And investors should feel confident about returns: <\/span>\u201cWe have seen a lot of private placement <\/span>investors locked into companies over the last two years, stuck with illiquid instruments due to COVID or geopolitical challenges. That is why we carefully select companies with high growth potential and good payout,\u201d Soliman said. \u201cSo if the government doesn\u2019t deliver, investors still get to walk away with returns.\u201d<\/span><\/p>\n

^^ You can read more from Soliman on the plans for the pre-IPO fund in the Privatization Watch section, above.<\/p>\n

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KEY TAKEAWAYS from EFG Hermes Research\u2019s 2023 One-on-One Live Poll<\/span>,<\/span> the only live <\/span>research poll we know of in frontier emerging markets. Participants ha<\/span>d <\/span>10 seconds<\/span> to<\/span> vote live on each of 10 questions. Here\u2019s a roundup of the results:<\/span><\/p>\n