Banking & Finance
StanChart Private Equity Spinoff Plans Middle East Investment
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(Bloomberg) — Affirma Capital, the private equity spinoff of Standard Chartered, plans to complete at least one acquisition in the Middle East and Africa over the next year.
The Singapore-based emerging markets group is targeting deals between $25 million and $100 million in the region where consumer spending is on the rise, according to Taimoor Labib, Affirma’s founding partner, head of the Middle East & North Africa and chairman of Africa.
The company has about $700 million to spend after it completed a management buyout of the U.K.-based lender’s private equity business in July.
Affirma, which already manages $3.6 billion in assets, is particularly interested in Egypt, Nigeria, and Jordan, Labib said. The firm is also planning to exit one of its investments in the Middle East and Africa over the next 12 months.
More from the interview with Affirma’s Labib:
- “Post devaluation, for dollar-based investors, it’s a great time to go into Egypt. It’s still early, but we’ve looked at quite a few businesses especially in the food and beverage and retail sectors.”
- “We’re positive on Saudi from a big-picture perspective. The strategic plans make sense and investors are waiting to see GDP growth and macro trends in 2019. If you see the improvement continuing, which we have seen in the first half, private equity will return in scale in 2020 or 2021.”
- “Nigeria is another country that went through a painful devaluation and are a year or two behind Egypt in their growth story. They need a decent 2019 to continue to recover, but Nigeria 2020 could be interesting as well. People want to consume and businesses want to expand.”
- “An internal rate of return of 25%, that’s the goal, that has to be the target to get well-groomed limited partners into an emerging market fund.”
- “To say Abraaj hasn’t hurt the Middle East or it hasn’t hurt all emerging markets would be disingenuous. We and others are going to have to prove ourselves more to LPs. It’s going to be longer fundraising cycles and the know-your-customer requirements for U.S. and European institutions will increase.”
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