The Sovereign Fund of Egypt (TSFE) and the New York-based investment manager, Concord International Investments, have signed a memorandum of understanding (MoU) to establish a joint venture to raise and manage a specialised healthcare fund that will invest primarily in the Middle East and Africa.
A Wednesday press statement revealed that the potential fund’s initial target size is $300m and it aims to achieve long-term capital appreciation by capitalising on direct investment opportunities in Egypt.
The fund aims to create a diversified healthcare platform that benefits from the ever-growing population in Egypt who needs various medical services. The fund also aims to create international export-oriented healthcare entities covering the various activities; unlock value in promising growth companies, under-utilized assets, and untapped specialities; and benefit from Egypt’s unique location and relatively lower service and production costs to serve Europe, the Middle East, and Africa.
“Investing in healthcare is a priority for the Egyptian government at this critical time when the world is facing the new COVID-19 pandemic crisis and the quality of the population’s healthcare is an integral part of the Egypt 2030 Vision for Sustainable Development,” said Hala El-Said, Minister of Planning and Economic Development and TSFE Chairperson.
The fund will act as a catalyst for attracting sizable foreign direct investments (FDI) as well as identifying co-investment opportunities in significantly large projects.
El-Said added that focusing on the healthcare sector is directly related to the Egyptian government’s programme to improve the quality of life for Egyptians by creating a fully integrated healthcare system that can improve healthcare indicators and achieve full coverage for all Egyptians.
“This diversified healthcare fund reflects the implementation of TSFE’s mandate to fast track attracting investments to public assets in a value accretive manner, while increasing private sector participation in the Egyptian economy, where the private sector is a main partner in the development path and will be responsible for implementing the greater share of the projects while the government takes on the regulatory role of setting standards and monitoring”, she concluded.
Moreover, Ayman Soliman, CEO of TSFE, said the sovereign fund and Concord International have started the process to establish a joint venture management company to source and manage investments on a non-exclusive basis, in healthcare and pharmaceutical services, to achieve long-term capital appreciation in public and private assets.
“TSFE’s role in attracting investments to such assets is essential at these challenging times. With the COVID-19 global pandemic still looming over the global economy, we need to be agile and create solutions that could and will elevate the strain the virus has caused over the healthcare systems in the region and on a global front. Both the healthcare and the pharmaceutical sectors have been on the top of the fund’s priority list, and today’s MoU signing culminates our collective efforts in securing FDI in these fields,” Soliman added.
Mohamed Younes, Chairperson of Concord Group, emphasised that demand for this industry, which covers pharmaceutical producers; diagnostic service providers such as pathology labs, diagnostic imaging services, nursing care, hospitals, polyclinics; and other specialised facilities, will continue to grow at an annualised double-digit rate in some segments in the foreseeable future.
“The tremendous opportunities for expansion in the Middle East and Africa using the resources of Egypt’s large growing market provides the Fund with a unique opportunity,” Younes said.