“Avans Manara” is considering a contribution to 6 funds for small and medium enterprises

Avanz Manara is considering a payment to 6 investment funds specialized for small and medium-sized enterprises, provided that the actual start of pumping investments into the two funds is before the end of the current year 2022.

Hany Asaad, founding partner of Avans Capital Management and general manager of Avans Capital Egypt, revealed the strategy of “Avans Manara” to enter the Egyptian capital market in response to the invitation of banks to invest their money in SME and venture capital funds.

In an interview with Amwal Al-Ghad, Asaad indicated that the Avanz Manara fund has received investment offers and requests from about 40 funds to contribute to it since the company was established last March and received approval from the Financial Supervisory Authority with an issued capital of about £905 million.

At the end of the first quarter of 2022, the National Bank of Egypt announced the launch of “Avans Manara Direct Investment” as the first company that aims to invest in funds to support small and medium projects FUND OF FUNDS, in partnership with Banque Misr, Banque du Caire, Ahli United Bank , Suez Canal Bank, The United and Commercial Bank and Fafa Bank Egypt. Misr Insurance Holding Company and Avanz Capital Group, within the directives of the Central Bank of Egypt to support small and medium enterprises to drive the economy.

Avanz aims to be an investment beacon in participating in investment funds that support small and medium-sized enterprises, in the implementation of the decision of the Central Bank issued in February 2021 on the addition of banks’ roles in the capital of investment funds in (Fund of funds) and trading companies intended for investment in the capital of small and medium-sized companies in the ratio of 25% Determined from the total portfolio of bank credit lines aimed at micro, small and medium-sized enterprises.

Recently, Avanz Capital contributed to and managed Egypt’s first fund for investment in projects issuing carbon certificates, EgyCOp, with an authorized capital of EGP 1 billion.

Asaad revealed the current plan to increase the size of Avanz Manara’s fund to EGP 2 billion in 2023, in line with the company’s aim to maximize the inflow of foreign and Arab capital into the Egyptian market in proportion to the size of the Egyptian market, which is among the largest markets in the Middle East and North Africa.

He explained that the new investment company aims to increase investments aimed at small and medium-sized enterprises by ensuring the necessary capital financing of these enterprises through contribution to investment funds that provide the necessary financing for these projects or by direct participation in these projects.

He pointed to the adoption of best practices in fund management in Egypt in an effort to attract international investors to support the activity of this sector of companies by contributing to these funds due to its importance for achieving economic growth.

economic crisis

Regarding the economic turmoil imposed by the nature of the current phase, Assaad stated that global and local financial markets have recently been facing challenges related to worsening inflation rates and rising interest rates, along with the tendency of central banks around the world to pursue monetary tightening policies, which resulted in the tendency of investors to invest in less risky investment tools, which affected the volume of direct investments aimed at developing markets.

He pointed out that the Egyptian state has already taken serious steps over the past few days by making decisions and measures aimed at maximizing the flow of foreign and Arab investments, whether direct or indirect, and working to create greater exchange rate flexibility, similar to the decisions made in 2016, which consequently supports the ability of the market to face and cope with external factors.

He stated that the instability of the currency market is one of the biggest negative factors affecting the domestic market, which is a factor of pressure on the exit of foreign investments from developing markets, stressing the need to harmonize the adoption of a series of policies with this. and structural reforms that help reassure investors.

startups

The founding partner of Avans Capital said that startups are one of the most important sectors in the Egyptian market, which represents an element of attraction for foreign investment, especially in light of the investment nature of these companies and their high growth rates, as well as their ability to provide more alternatives to consumers, explaining that the reliance on financial technology and digital solutions is pushing various startups to provide better services.

He added that the African market in general has witnessed a double growth rate in the last ten years in attracting investment, which has witnessed difficulties in convincing foreign funds and institutions to enter and invest in emerging companies. Funds are ready to enter into various investments in the African and Arab markets. .

He said that the Egyptian market managed to attract almost 500 million dollars in startup investments during the last year 2021, which is a small percentage compared to what is pumped into startups with investments available during the year, which is estimated at about 24 billion dollars, pointing out that the volume of investment in Emerging Market companies in the Egyptian market is not commensurate with its size.” He expected the Egyptian market to capture more foreign investment and financing over the next 3 years, with government support for this segment of businesses.

He pointed out that recently venture capital funds have been working on developing their tools and restructuring to suit the Egyptian market, in order to open the door to the diversification of financing alternatives for this segment of companies, in addition to investment funds in small and medium enterprises, and the interest of the central bank. a number of banks that direct part of their investments, with positive factors that have increased the desire of foreign investors to enter the Egyptian markets in order to pump their investments into investment funds.