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Monday, 17 September 2018

EFG eyes entry into new EM markets, growth in non-banking financial industry, and investment in education and energy

**#6 EFG eyes entry into new EM, sees growth in non-banking financial services: EFG Hermes is looking to enter one or two new emerging markets in the next two years as part of a plan to expand its footprint, Group CEO Karim Awad tells Al Mal in an interview. The firm is already active in some 11 countries and expects to launch operations in Nigeria soon, he said, noting that EFG’s geographic presence in the region allows it access to 95% of markets on the MSCI EM index.

The company also sees a lot of potential for growth in NBFS, Awad said. The segment is expected to generate half of the company’s total revenues in five years’ time. EFG Hermes pioneered the expansion into non-bank financial services with the launch a couple of years back of its successful leasing startup. It also acquired leading private-sector microfinance outfit Tanmeyah and launched valU (pdf), a consumer finance startup, in December 2017. New forays into NBFS are in the pipeline, Awad said.

You can also expect EFG to continue making prop investments in education and energy in the coming period, Awad suggested. Preliminary talks are on to launch a new education-focused fund in Egypt, he said, adding only that the idea has already generated a lot of interest. Awad also pointed to EFG’s recent acquisition of four schools from the Talaat Moustafa Group in a EGP 1 bn transaction through its joint venture with GEMS Education. Awad said Vortex, the firm’s European renewable energy platform, sees substantial new opportunities in the market.

EFG Hermes’ Egyptian pipeline includes the initial public offering of private education outfit CIRA. Another unspecified transaction should close by the end of the year, Awad said, noting that his firm has closed 12 transactions so far in 2018.

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