The Overseas Private Investment Corporation, the U.S. Government’s development finance institution, and Abraaj Capital, a private equity group investing in growth markets worldwide, have signed a $150 million commitment to the Riyada Enterprise Development Growth Capital Fund. The vehicle will invest in SMEs in the MENA region, including Egypt. With a capitalization of $400 million, the fund is managed by Aureos Capital (the small and mid-cap investing platform of the Abraaj Group).
The Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance institution, and Abraaj Capital, a leading private equity group investing in growth markets worldwide, signed a $150 million commitment to further enable the growth of entrepreneurial small and medium-sized enterprises (SMEs) in the Middle East and North Africa.
“We are pleased to work with Abraaj Capital to make President Obama’s pledge a reality.”
The fund, called the Riyada Enterprise Development Growth Capital Fund (RED), will invest in SMEs in the MENA region, including Egypt. With a capitalization of $400 million, the Fund managed by Aureos Capital (the small and mid-cap investing platform of the Abraaj Group) serves as a much-needed source of financing for SMEs, a powerful engine of economic growth across MENA but one which has traditionally lacked access to long-term capital. Through this initiative, Egyptian SMEs are benefiting with Egypt being one of the core target countries of the fund.
OPIC Chief of Staff John Morton and Abraaj Capital Ltd CEO Mustafa Abdel-Wadood signed the commitment letter at a ceremony in Cairo as part of a U.S. delegation to Egypt led by Deputy Secretary of State Thomas Nides and Deputy National Security Advisor Michael Froman, and joined by more than 100 U.S. business executives.
In his June 2009 speech at Cairo University, President Obama pledged that the U.S. Government would launch a new Fund to support technological development in Muslim-majority countries. Later that year, OPIC issued a call for proposals to establish technology and innovation funds according to the President’s pledge. The Abraaj Fund was one of a handful of Funds approved by the Board from the 87 responses OPIC received in response to the call. In June 2010, OPIC’s Board approved financing for Abraaj Capital.
“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,” said OPIC President and CEO Elizabeth Littlefield. “We are pleased to work with Abraaj Capital to make President Obama’s pledge a reality.”
Mr. Abdel-Wadood said, “As today’s announcement demonstrates, Abraaj Capital is fully committed to supporting the expansion of small and mid-cap (SMC) businesses across the Arab world. We are very pleased to have joined hands in this effort with OPIC, which is investing in long-term economic growth in the wider region. We firmly believe that the SMC 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.”
OPIC is the U.S. Government’s development finance institution. It mobilizes private capital to help solve critical development challenges and in doing so, advances U.S. foreign policy. Because OPIC works with the U.S. private sector, it helps U.S. businesses gain footholds in emerging markets catalyzing revenues, jobs and growth opportunities both at home and abroad. OPIC achieves its mission by providing investors with financing, guarantees, political risk insurance, and support for private equity investment funds.
Established as an agency of the U.S. Government in 1971, OPIC operates on a self-sustaining basis at no net cost to American taxpayers. OPIC services are available for new and expanding business enterprises in more than 150 countries worldwide. To date, OPIC has supported more than $200 billion of investment in over 4,000 projects, generated an estimated $75 billion in U.S. exports and supported more than 276,000 American jobs.
About Abraaj Capital Group
Abraaj Capital Group is a leading private equity group investing in global growth markets. Founded in 2002 by Arif Naqvi, the group has raised over US$ 8 billion and distributed c. US$ 3.5 billion to investors. Employing over 300 people, the group has 36 offices spread across 7 regional hubs in Bogota, Dubai, Istanbul, London, Mumbai, Nairobi and Singapore.
Abraaj Capital Group currently manages approximately US$ 7.5 billion across 25 sector and country-specific Funds in 3 primary strategies: (i) Private Equity (majority and significant minority investments greater than US$ 50 million) which is managed by Abraaj Capital; (ii) Small and Mid-Cap (SMC) PE investing (targeting influential minority investments of less than US$ 50 million) which is managed by Aureos Capital; and (iii) PE Real Estate (primarily yield-generating real estate investments) which is managed by ASAS.
Funds managed by the group have holdings in over 150 partner companies that collectively employ in excess of 100,000 people and create sustainable value in sectors including manufacturing, education, retail, aviation, oil and gas, financial payments infrastructure, healthcare and agribusiness. The group’s current partner companies include industry leaders such as Network International, the largest independent payment solutions provider in the Middle East and Africa, Brookside Dairy, the largest dairy in East Africa, and Iasacorp, a long established family run women’s retail business in Peru.
The group is committed to the highest environmental, stakeholder engagement and corporate governance standards and is a signatory of the UN-backed Principles for Responsible Investment and the United Nations Global Compact.
Abraaj Capital Limited, a member of the Abraaj Capital Group, is regulated by the Dubai Financial Services Authority.
For further information on Abraaj Capital, please contact:
Mitali Atal, Vice President