By Andrei Skvarsky.
Abraaj Capital, a leading Middle East private equity firm, is going to set up a $400m fund to boost small- and medium-scale business in North Africa and the Middle East and has signed a $150m deal with the US government to partially finance the project.
Egypt is “one of the core target countries” of the Riyada Enterprise Development Growth Capital Fund (RED) to be set up under Sunday’s agreement between Abraaj and the US Overseas Private Investment Corporation (OPIC), a government agency for private enterprise development abroad, Abraaj said in a statement.
Abraaj, which is based in Dubai, was last year ranked as the largest private equity firm worldwide by Private Equity International magazine. It is also is the biggest private equity firm in the Middle East. Its geography spreads beyond the Middle East and North Africa to Turkey, Singapore, India, Britain, and Pakistan.
The firm has helped accelerate and facilitate the growth of more than 50 companies in 15 countries in its core region.
The deal follows a 2009 promise by US President Barack Obama to help launch a fund to support technological development in Muslim-majority countries.
“Perhaps more than any agent of change, small businesses can help to restart the Egyptian economy and augment the transformative events of 2011 with economic growth that reaches a majority of the Egyptian people. Creation of this investment Fund is an important step in that direction,” the Abraaj statement quoted OPIC chief executive Elizabeth Littlefield as saying.
“We are pleased to work with Abraaj Capital to make President Obama’s pledge a reality,” she said.
Mustafa Abdel-Wadood, a top Abraaj executive, said: “We firmly believe that the SMC [small- and mid-capital] segment, which continues to suffer from a dearth of capital, is critical for economic development and job creation. At the same time, having recently invested in 15 SMCs across the MENA in various value-added industries, including two businesses in Egypt, we also recognize the tremendous growth opportunities that exist in this segment of the market.”
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