What Has the Egyptian Sovereign Fund Achieved Since Inception?

We delve into the mechanics of this sovereign fund and how much it accomplished so far.
What Has the Egyptian Sovereign Fund Achieved Since Inception?

Sovereign funds are one of the largest investment tools in the world, with the number of sovereign funds in the world reaching about 73 funds in 50 countries and managing investments of more than $7.3 trillion, so Egypt found it important to issue a fund to search for sources to finance the economic and social development plan that began. Since 2014, President Abdel Fattah El-Sisi issued a decision to establish an Egyptian sovereign fund in 2018, with a capital value of EGP 200 billion, and the volume of assets transferred to the fund is about EGP 30 billion.

The Egyptian Sovereign Fund was established in 2018 to attract investments to Egypt, encourage joint investment in state-owned assets, and manage them to achieve financial goals, using investment strategies that include investing in foreign financial assets in order to increase their value and effectiveness for the Egyptian economy. The fund seeks to choose investable assets from various state agencies to promote them and jointly invest in them with local and foreign investors, in addition to increasing the role of the private sector in the economy, and creating job opportunities for youth in Egypt.

The fund is managed independently and operates through special regulations that allows partnerships to create investment opportunities in a unique set of assets. This will support the government’s role in implementing structural reforms, which leads to increased economic growth in various sectors.

Sub-funds of Egypt’s Sovereign Fund

Misr Sub-Fund for Financial Services and Digital Transformation:

The purpose of the fund is to invest in the field of non-banking financial services, digital transformation, financial inclusion, and financial technology, including insurance services, insurance brokerage, real estate financing, financial leasing, commercial factoring, microfinance, portfolio management, financial investments and securitization, and the establishment of specialized funds in the field of finance.

Egypt Sub-Fund for Utilities and Infrastructure:

The purpose of the fund is to invest in facilities and infrastructure according to world class standards and rules, through cooperation and participation with fellow funds from around the world.

Misr Sub-Fund for Health Services and Pharmaceutical Industries:

The purpose of the fund is to invest in the field of health services and pharmaceutical industries abiding by world class standards.

Misr Sub Fund for Tourism, Real Estate Investment and Antiquities Development:

The purpose of the fund is to invest in tourism, real estate, the development of monuments, and buildings of a distinctive architectural character, in accordance with the best international standards and rules.

A joint investment platform has been launched between Egypt’s Sovereign Fund and the UAE represented by the Abu Dhabi development holding company ADQ with a value of $20 billion. The platform aims to implement vital projects in areas of great economic and social feasibility for both countries, especially in the field of logistics, financial services, infrastructure as well as manufacturing industries, conventional and renewable energy, technology, food, real estate, tourism, and healthcare.

The Fund’s Accomplishments So Far

Introducing the brochure of conditions for the exploitation of the Tahrir complex – April 2021 – The Egypt Sovereign Fund announced the launch of the brochure of conditions for the exploitation of the Tahrir complex during the current April, in order to develop the complex in partnership with the local and international private sector, after the ministries were transferred to the new administrative capital, and the fund will have huge real estate portfolios in The downtown area needs real estate developers to lay out the best plans to take advantage of them.

March 2021: With a minority stake of 10%, the fund invested in ADQ’s acquisition of Amoun Pharmaceuticals Company last March.

Also last March, the Egyptian Sovereign Fund signed an agreement with the GEMS Education Group to develop and manage two schools west of Cairo, taking advantage of the state assets transferred to it to activate its strategy aimed at maximizing the return from those assets.

The Egypt Sovereign Fund and financial group EFG Hermes announced the completion of the process of due diligence examination of the Arab Investment Bank after the approval of the Central Bank, with the aim of acquiring 76% of the bank’s capital by subscribing to an increase The issued and paid-up capital, which will be officially announced after the completion of the legal procedures.

December 2020: In partnership with the Sovereign Fund, ADNOC, the Abu Dhabi oil giant acquired the Wataniya Petroleum, the first company affiliated with the National Service to be offered to investors with more than 200 stations.

November 2020: The Suez Canal Economic Authority, Egypt’s Sovereign Fund and four private companies signed the founding contract for the National Company for Railroad Industries which was established in accordance with the law of economic zones of nature.

October 2020: In cooperation with the Egyptian Ministry of Supply and Internal Trading, the fund establish strategic warehouses to store medicine and medical supplies with the aim of increasing the strategic stockpile of food supplies, according to the most impoverished areas in the different cities.

September 2020: The fund signed an agreement with the Ministry of Electricity to maximize the value of benefiting from projects and assets owned by the bodies and companies of the Ministry of Electricity and Renewable Energy to pump the necessary investments to develop and qualify them, whether in the field of conventional and renewable energy. The fund also contributed to signing agreements with electricity exports with Libya and Jordan. Moreover, a preliminary agreement was signed with Cyprus and Greece for the Euro-African electrical interconnection project in 2019.

June 2020: The fund signed a contract to develop the archaeological areas in Salah al-Din al-Ayyubi citadel, in order to revive the archaeological areas and raise their historical and economic value.

May 2020: A Memorandum of Understanding between Egypt’s Sovereign Fund and Concord International Investment Management Company was signed to establish a joint company to manage a fund specialized in the healthcare sector. The target fund size is $300 million as an initial stage and aims to maximize the long-term value of assets by benefiting from Direct investment opportunities in Egypt.

February 2020: The Egyptian Sovereign Fund signed a cooperation agreement with the National Service Projects Organization to invest in its various companies, whereby two companies, the National Natural Water Bottling Company (Safi) and the National Petroleum Company for investment were selected.

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