Egyptian investment bank EFG Hermes aims to expand into Turkey, Iraq and Libya and plans to grow its asset management arm by 50 percent after the completion of its joint venture with Qatar’s QInvest, it said on Friday.
EFG Hermes announced its tie-up with QInvest in May and the deal should close this month, said Kashif Siddiqui, managing director and head of asset management at EFG Hermes, who will be co-CEO of the joint venture.
QInvest will hold 60 percent and EFG’s holding company will own 40 percent of the venture, which will be branded EFG Hermes.
The enlarged business will aim to increase its assets under management to about $5 billion within a couple of years, from $3.4 billion now, Siddiqui said.
The deal will create the biggest investment bank across the Middle East and North Africa (MENA) region and also pull in brokerage and asset management operations.
It plans to expand with the help of $250 million that QInvest is injecting into the venture.
“This deal brings a partner with similar ambitions and deep pockets, and will enable us to penetrate new markets,” Siddiqui told Reuters in an interview in London.
Based in Cairo, EFG Hermes is expected to benefit from QInvest’s strong relationships with Qatar’s sovereign wealth funds, who are active investors across a range of sectors globally, including financials, telecoms and property.
“It does give us access to some of the largest and most active sovereign wealth funds, and we can show them opportunities on almost a weekly basis,” said Karim Awad, head of investment banking at EFG Hermes, who will run the joint venture with Siddiqui.
The co-CEOs said the tie-up with QInvest - a much smaller investment bank only set up in 2007 - would also bring more expertise in Islamic finance.
EFG is one of several investment banks attempting to become regional powers, rather than take on the likes of Goldman Sachs on a global basis. They include Brazil’s BTG Pactual in Latin America and VTB Capital in Russia.