CI Capital launches three new funds

CI Capital, the investment arm of Egypt’s Commercial International Bank, will launch three new investment funds, it announced, and has three IPOs in the pipeline. The three funds are: a capital protected fund; a bond fund; and a real estate fund. CI has already raised 250 million Egyptian pounds ($44 million) from its debut fund, Hemeya.

(Reuters) – CI Capital, the investment banking arm of Egypt’s Commercial International Bank plans to launch three new investment funds and is working on three initial public offerings to soak up liquidity, it chief executive said on Tuesday.

CI Capital CEO Karim Helal told the Reuters Middle East Investment Summit the firm is also working on some private equity transactions and managing bond issuances as the debt market slowly picks up in Egypt.

CI Capital was acquired by Egypt’s CIB in 2008.

“There is a tremendous amount of liquidity in Egypt and it is still a cash society. There is also a shortage of investment tools,” he said in the UAE capital.

The three new open-ended funds — a capital protected fund, a bond fund and a real estate fund — come after the firm’s debut investment fund “Hemaya” launched in July this year. At the last closing it stood at 250 million Egyptian pounds ($44 million).

CI Capital is awaiting approval from the regulator for these funds. “We expect to launch them by first quarter 2011,” Helal said.

Although the country’s stock market is yet to return to pre-crisis levels, the IPO market is opening up with CI Capital mandated for one of them and is working on two others, he said.

“If you price it right, it will be a success,” he said, declining to name the companies seeking IPOs.

Egypt, which is lagging in the corporate debt market, may see two bond issuances this year with a third in the market, all oversubscribed many times, he said. CI Capital is working on “some” corporate issuances and is aiming to become a market maker in future.

“The key is creation and activation of a secondary market and that may happen soon, we need that soon,” he said.

CI Capital’s current assets under management total 12 billion Egyptian Pounds, up from 4 billion Egyptian Pounds in January 2009, after money took flight from equities into money market funds, he said.

“Asset management is one of our growth areas and we will be actively pushing in 2011 into high net worth individuals portfolio management also from institutions,” he said.

In the private equity space, CI Capital is aiming to raise cash through an Infrastructure and a Green fund, after raising funds for an SME fund that was managed by Abraaj Capital, he said.

“We will continue to work as promoters and initiators of private equity funds but not as managers. We are working on a busy pipeline of deals,” he said, declining to elaborate.

CI Capital has a 50 percent stake in a brokerage firm in Abu Dhabi and a representative office in Hong Kong.
(Reporting by Stanley Carvalho; Editing by Hans Peters)