By : Mahmoud Hammad
Investment Ministry decree to establish firm for financing small- sized enterprises is a ‘global approach’Arab investors extremely keen on investing in Egyptian Small and Medium sized Enterprises (SMEs) sector Egypt became a prominent market for foreign investments after liberalising Egyptian pound exchange rate.
In an interview with MEO, CEO of Target Investment Portfolio Management Company, Nour El Din Mohamed, stated that the decree of Egypt’s Investment and International Cooperation Ministry regarding establishing a firm for financing small-sized enterprises, is a ‘global investment approach’, since international economics tend to invest in SMEs.
“Establishing such a firm will be a ‘great step’ if it is managed under the supervision of global expertise that is able to be promoted in Arab and foreign markets,” the official said. He added that Arab investors are extremely keen on doubling and injecting more investments in Egyptian SMEs sector to sell projects later through direct investment funds’ mechanism in order to achieve massive profits in Egypt.
Throughout the following interview, CEO Mohamed told us about the company’s investments, remarkable investment funds it manages, and its strategy for the upcoming period.
Would you please tell us more about Target Investment Portfolio Management Company?
Target Investment Portfolio Management company was established in November 2015 with paid-up capital estimated at 1.5 million Egyptian pounds.The company’s issued capital has been increased to 3 million pounds then to 5 million pounds.
The company started its business in the Egyptian market in 2006 under the name of ‘Grand’ then it was changed in 2015.
How much is the value of assets managed by your company? And what is the strategy of Target Investment?
The company manages investment assets in the Egyptian market estimated at 300 million pounds.
About the strategy, the BoD approved forming specialised firms to manage investment funds including real estate and insurance activities within the coming period for one billion pounds.
Target Investment is currently planning to manage an investment fund for the Arab Misr Insurance Group (GIG).
Do you see investment funds affiliated to the insurance sector, prominent?
Yes, investment funds affiliated to the insurance sector bring in considerable revenues for policy holders and beneficiaries. In addition,the Egyptian insurance sector -including commercial and Takaful firms- is considered one of the important sectors in Egypt that targets establishing investment funds to serve their clients.
Do insurance firms own sufficient investment funds in the Egyptian market?
No, the number of investment funds that insurance firms establish are too low compared to those established by Egyptian banks. Thus, the firms need to activate the existent funds and establish a massive number of new ones within the upcoming period. Accordingly, I urge the insurance sector to form investment funds in coordination with local banks and to establish funds for shares.
What are the most remarkable investment funds that Target Investment manages?
Our company is currently managing the investment fund of Misr El Kheir Foundation which is supervised by the state’s former Mufti; Ali Gomaa, in addition to other portfolios. Hence, Target Investment is currently establishing a company for financial consultations with capital estimated at 250 million pounds. The new company would target managing firms and peoples’ money in the market as well as making financial lists for each by the end of every fiscal year.
How do you appraise the approach of the Investment Ministry in establishing a firm for financing small-sized enterprises?
All global investment approaches tend to invest in SMEs, thus, establishing a firm to fund such projects is a successful idea but if the founder is a governmental authority, any obstacle that may face establishing the firm should be removed as establishing a company for financing small-sized enterprises with the exisiting routine and bureaucracy would be useless.
In addition, Arab investors are extremely keen on doubling and injecting more investments in Egyptian SMEs projects to sell them later to achieve massive profits in Egypt.
What are the main factors that this firm needs to succeed?
Establishing such a firm will be a great step if it is managed under the supervision of global expertise which will be able to promote it in Arab and foreign markets, especially that the Egyptian market enjoys prominent investment opportunities.
Although many firms face obstacles following the political changes and foreign currency crisis, the current time is highly encouraging for foreigners to invest in Egypt notably after floating the Egyptian pounds’ exchange rate