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Thursday, 7 May 2020

SFE, Concord sign agreement on USD 300 mn healthcare fund

INVESTMENT WATCH- Egypt’s sovereign wealth fund sets up USD 300 mn healthcare fund JV with Concord: The Sovereign Fund of Egypt (SFE) and Concord International Investments, the SEC-regulated firm set up by Mohamed Younes and Prince Abbas Hilmi, have signed an MoU to set up a joint venture to manage a USD 300 mn healthcare fund focused on Egypt and the Middle East, according to a statement (pdf).

The fund will primarily target the support and expansion of both public and private healthcare infrastructure projects. It will also be mandated with setting up export-driven healthcare ventures and “identifying co-investment opportunities in significantly large projects.”

Is this one of the “low-risk” investments the SFE hinted at before? Just last month, the SFE was preparing a list of potential low-risk investments to present to investors after the covid-19 outbreak reaches a point of containment, SFE CEO Ayman Soliman said. The investments would be designed to restore confidence in the Egyptian economy.

The pandemic has prompted the SFE to revisit its list of priority sectors, Soliman told CNBC Arabia yesterday. Sectors that will make up the bulk of the fund’s assets moving forward include hospitality and tourism, education and healthcare, manufacturing and food processing, and fintech and banking, he said. The fund is currently targeting EGP 60 bn of assets to add to its portfolio, and is planning to quickly grow to EGP 1 tn.

Background: The SFE was set up less than a year ago in a bid to more effectively manage state-owned entities. The fund has so far been active in the energy sector — offering up a 70% stake in the first of three Siemens-built 14.4 GW combined cycle power plants — and was looking to get a piece of Banque du Caire before it shelved its IPO plans earlier this year. It has also entered into a USD 20 bn partnership with the Abu Dhabi Holding Company, signed an agreement with Hassan Allam Holding to invest in electricity, water, infrastructure, and renewable energy projects, and inked an agreement in February with the military’s National Service Products Organization to market some of its subsidiaries to private investors.

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