Sphinx Egypt and Citadel Capital Launch Turnaround Fund
The International Finance Corporation and European Investment Bank have joined the first closing of a promising new US$ 100 million fund that targets distressed assets in multiple sectors of the Egyptian economy
April 6, 2009
Sphinx Private Equity Management (Sphinx Egypt), a leading private equity management company with a proven track record of investing in medium-sized companies, announced on April 6, 2009, the launch of a US$ 100 million fund that targets distressed assets in Egypt.
The European Investment Bank (EIB) and the International Finance Corporation (IFC) are each investing US$ 17 million in the Fund alongside Citadel Capital, the MENA region’s leading private equity firm, whose 19 Opportunity-Specific Funds (OSFs) control investments worth more than US$ 8.3 billion in industries ranging from energy and food to transportation and specialty retail. EIB and IFC, who both played prominent roles in the development and creation of the fund, will be acting as Anchor Investors.
Citadel Capital is sponsoring the Sphinx Turnaround Fund with a cash investment of US$ 10 million. The Geneva based Swiss Investment Fund for Emerging Markets (SIFEM) is in the process of finalizing its commitment of US$ 7.5 million to the Fund.
“The fact that we were able to close on this fund now, amidst such turbulent economic conditions, is a clear indication that institutional investors continue to view Egypt as an attractive investment opportunity. With a fund that mainly targets distressed assets and turnaround situations we are providing timely access to finance and managerial expertise during one of the worst credit crunches in recent history,” said Marianne Ghali, Managing Director of Sphinx Egypt and the Sphinx Turnaround Fund.
Citadel Capital is a majority shareholder in Sphinx Egypt.
Commenting on the validity and timing of the fund, Rashad Kaldany, IFC Vice President for the Middle East and North Africa said, “Private equity funds can play an important role in providing capital emerging markets companies need to survive and grow. During this time of economic crisis, IFC is particularly pleased to support a fund that invests in distressed or defaulting enterprises to make them viable again,” said Rashad Kaldany, IFC’s Vice President for Middle East and North Africa. “We look forward to promoting similar funds in the Middle East through our partnership with Citadel Capital.”
The Sphinx Turnaround Fund will be investing in Egypt-based small and medium-sized enterprises that are distressed, in default, or in need of restructuring. In some instances, the Fund may also consider investing in companies that are in need of expansion capital to pursue specific growth opportunities.
Ahmed Heikal, Chairman and Founder of Citadel Capital, added, “Marianne Ghali, who has spearheaded a number of highly successful private equity investments in the past, has an excellent track record when it comes to restructuring and managing distressed assets. Her experience will be of great value on this new venture.”
Both Heikal and Citadel Capital Managing Director and Co-Founder Hisham El-Khazindar are members of the Turnaround Fund’s investment committee.
Ghali says the Fund has already identified a number of investment opportunities. Projects already in the pipeline cover seven sectors, including geo-textiles, automotive assembly, cosmetics, logistics, food processing, specialty glass and pharmaceuticals.
“The significant number of European institutional investors that have shown interest in this fund signals not just strong interest in the type of opportunities that are available in Egypt for medium- and long-term investors — it is also an endorsement of the track records of Sphinx and Citadel Capital,” said El-Khazindar.
“In addition to institutional investors, the fund is also targeting high-net-worth individuals who share our strategy and vision,” added Ghali.
Sphinx Egypt also manages the portfolio of Grandview, Citadel Capital’s platform company for mid-cap investments, and has over US$ 230 million in assets under management.
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Sphinx Egypt is a private equity management company with extensive experience in the field of direct investment in medium-sized companies. The company currently has US$ 230 in assets under management. As a subsidiary of Citadel Capital, Sphinx leverages the group’s network, deal flow and knowledge of the equities market in the Egypt and the region.
IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $16.2 billion in fiscal 2008, a 34 percent increase over the previous year. For more information, visit www.ifc.org.
The European Investment Bank, was created by the Treaty of Rome in 1958 as the long-term lending bank of the European Union. The task of the Bank is to contribute towards the integration, balanced development and economic and social cohesion of the EU Member States. The EIB raises substantial volumes of funds on the capital markets which it lends on favourable terms to projects furthering EU policy objectives. The EIB continuously adapts its activity to developments in EU policies.