Karim Moussa, head of Equity Management at EFG-Hermes, told Daily News Egypt in a private interview during a conference held by the group last week, that EFG Hermes is studying the establishment of a real estate investment fund in 2020, probably in cooperation with a major real estate developer.
He pointed out that studies are being prepared regarding the establishment of the fund. However, the fund’s capital and its investment strategy have not yet been determined. This is an aspect that will become clear after the completion of its studies.
Turning to the education fund established by the group last year, in cooperation with the Dubai-based GEMS Education, in which each partner holds 50% share, Moussa said that his company alone invested $20m of the total fund investments, worth $133m.
New announcements will be made in the coming weeks regarding additional acquisitions throughout schools in Cairo and Alexandria worth $30m.
In general, Moussa revealed that there is a plan for the fund to implement two or three deals in 2019 with a total capacity of 4,000 students. The new deals will raise Hermes’ shares in the fund’s investments to $35-40m.
Moussa explained that the $20m invested by Hermes in the education fund is worth its contribution in the acquisition in four Talaat Mostafa Group schools in a deal worth $58m with a total capacity of 7,000 students, including three schools in Madinaty and one school in Rehab. He added that the remaining value of the deal was paid by GEMS.
Furthermore, Moussa pointed out that the fund will launch schools it owns on the Egyptian Exchange (EGX). He expects this to support the relative weight of the education sector on the EGX through supplying new promising goods that will attract new investments to the market. He expected the first school to be floated within two years.
EFG-Hermes ended the second closure of the education fund in partnership with the GEMS Foundation worth $133m at the end of the second quarter (Q2) of 2019, while the first closure of the fund worth $109m was concluded at the end of 2018.
Moussa said that EFG-Hermes equity management is managing $4bn, including $1bn of direct investments, $3bn in the investment funds, and the portfolios sector.
With regard to direct investment in the health care sector operations, Moussa said that the company is moving toward concluding a new deal within two weeks. That deal will be worth EGP 350m to acquire a company that works in the pharmaceutical sector.
The company will be the group’s first investment in the health care sector.
In Q1 of 2019, the credit team launched the FIM Global Sukuk Fund. In its early stages, the fund generated positive returns of 1.43%, compared to the benchmark, which has returned 1.22%. Moreover, the credit team is working closely with the sales team to actively market the FIM credit strategy.
With regard to the group’s investment in energy and infrastructure, the division process of Vortex I and Vortex II (Vortex Wind), which together hold a 49% stake in a 998MW pan-European portfolio, reached financial close at the end of March 2019.
The portfolio divested includes 56 operational wind farms with gross capacity of 998MW spread across Spain, France, Portugal, and Belgium. Vortex Energy was launched four years ago and has grown to become a prominent renewable energy-focused investment manager in Europe and the UK with an 822MW solar and wind portfolio, and combined executed transactions in excess of €2.4bn.
The sale of Vortex Energy’s wind assets demonstrates EFG Hermes’s ability to acquire, manage, and exit renewable energy investments on a global scale. Vortex Energy is now embarking on a new chapter focusing on further investments in the sector, specifically targeting North America, Europe, and Latin America.
The Vortex platform continues to manage Vortex Solar, a 100% shareholder of 365MW solar PV farm in the UK, which was completed back in May 2017. Vortex Solar is jointly owned by Beaufort (5%) – a 100% owned subsidiary of EFG Hermes Holding, Tenaga Nasional Berhad (50%), and KWAP (45%).
Beaufort is the investment and asset manager of the Vortex Energy platform.
On the operational front, Vortex Solar’s EBITDA reached £5.2m in Q1 of 2019, overachieving its budget.