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Thursday, 18 February 2021

Ezdehar targets USD 100 mn first close for its next SME fund by mid-year, mulls separate impact investing vehicle

Private equity firm Ezdehar is targeting a first close of USD 100 mn on its second fund by the middle of 2021, founder and Managing Director Emad Barsoum tells Enterprise. A second and final close of the fund — dubbed Ezdehar Egypt Mid-Cap Fund II — will come before the end of the year, raising USD 80-100 mn, he said. The company previously planned to reach first close on the midcap-focused fund in late 2020, but like everything else in the world was delayed due to covid-19.

Blue-chip investors are already in: Barsoum confirmed that the European Bank for Reconstruction and Development, the European Investment Bank, the Sawiris family’s Gemini Holding, the UK's CDC and the Netherlands’ FMO have all committed capital to the fund. Negotiations are ongoing with the International Finance Corporation and the Egyptian American Enterprise Fund.

What does Ezdehar have appetite for? The new fund will focus on manufacturing, pharma, healthcare, consumer goods, F&B and education, Barsoum told us. He told the local press last year that the new vehicle will mainly target Egypt-based companies with single-transaction ticket sizes of USD 10-30 mn.

A third fund in the pipeline? The firm is presently looking at the potential launch of an impact investing fund later this year or next, he told us. Impact investing is when the folks committing capital do so in the expectation that their investment will have a positive environmental and social impact at the same time as it generates a financial return. (Want more? Go have a look at the Global Impact Investing Network’s page here.)

Ezdehar will exit two high-growth companies this year as it nears the end of its five-year holding period, Barsoum confirmed, without providing further details. The subsidiaries are delivering annual top line growth of 30-40% per year, the local press reported yesterday. The company said last October that it was moving towards exiting from three investments and went on to sell its full 22.5% stake in loyalty services provider Dsquares to Lorax Capital Partners.

Background: The company launched its first USD 100 mn investment vehicle, Ezdehar Mid-Cap Fund I, in 2016 to invest in mid-cap companies. Its portfolio is online here.

IN OTHER INVESTMENT NEWS-

Elsewedy Electric is interested in investing in Pakistan and is sending a team there to kick the tires on potential transactions, CEO Ahmed El Sewedy told Pakistan’s Foreign Minister Shah Mahmood Qureshi during a visit to Cairo earlier this week, according to a statement. Qureshi met with a group of Egyptian investors yesterday to discuss potential openings for Egyptian firms in the Pakistani energy, construction, pharma, tourism, IT and logistics sectors.

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