Abraaj Capital Ltd., the Middle East’s biggest private-equity company, is in “advanced stages” of investing $20 million in small and medium-sized Egyptian companies and is also targeting investments in Saudi Arabia.
The firm will be “making two or potentially three investments” in Egypt soon in industries including “agribusiness and information technology,” Tom Speechley, a senior partner, said today in an interview at the World Economic Forum in Davos, Switzerland. Abraaj, based in Dubai, is also considering its first small and medium-enterprise “investment in Saudi Arabia, in the health-care and information-technology industry,” he said.
Speechley is chief executive officer of Abraaj’s Riyada Enterprise Development Fund, set up in 2009 to raise $500 million to buy stakes in more than 100 small and medium-sized companies in the Middle East, North Africa, Turkey and Pakistan over the next four years.
Gulf Arab economies pump more than 20 percent of the world’s crude oil and have been spending tens of billions of dollars on infrastructure and industry to boost growth, creating opportunities for private-equity companies. Oil-exporting economies of the Middle East and North Africa will expand by an average 3.6 percent this year and by 5.1 percent in 2013, according to the International Monetary Fund.
In August, Abraaj acquired the North African private-equity fund of Amundi, the French asset manager jointly owned by Societe Generale SA and Credit Agricole SA. The company, which manages about $6.2 billion, took over management of the $161 million SGAM Al Kantara Fund and absorbed its 11-member investment team to boost its presence in North Africa.
In Saudi Arabia, “there is a huge opportunity for reasons that include a wave of new entrepreneurship, including women entrepreneurs, and because SMEs are often in the supply chain of larger conglomerates and in Saudi Arabia you do have larger conglomerates,” Speechley said. “Right across the region we see the SME segment as both a phenomenal investment opportunity but also the key driver of economic and job growth.”
Abraaj started a company in Saudi Arabia in January 2011 with 2 billion riyals ($533 million) to invest in small and medium-sized enterprises, private equity, public capital markets and real estate.