Citadel Capital: 2013 Vintage Year For PE Investments In Arab Spring Countries

Citadel Capital Managing Director Abdalla ElEbiary participated in a key panel discussing the alignment of investment strategies with current market conditions at the annual S&P 500 Leader’s Forum in Abu Dhabi

“2013 will be a good vintage year for private equity investments in the post-Arab Spring countries — provided you’re willing to consider longer holding periods,” said Citadel Capital Managing Director, Abdalla ElEbiary at the S&P 500 Leaders Forum in Abu Dhabi.

ElEbiary who participated in a panel that discussed revisiting business models and the alignment of investment strategies with current market opportunities, told an audience of senior business leaders that fundamentally a good vintage year in private equity is having a fund that closes with lots of cash and lots of well priced opportunities that it can target.

“Asset prices across the region are not skyrocketing at the moment because there is still a wait-and-see attitude among many investors. Considering what we view as compelling regional fundamentals such as population growth, energy deregulation, an unmet demand for energy and governments who are willing to pullback and let the private sector take the lead, then investments made in 2013 will capture outstanding upside potential between investment and exit provided they are well run,” said ElEbiary.

Citadel Capital, the leading private equity firm in Africa and the Middle East controls investments of more than US$ 9.5 billion in key sectors including energy, mining, agriculture and consumer foods, transportation and logistics and cement manufacturing. The firm has invested US$ 4 billion in Egypt since 25 January 2011, including the arrangement of full financing for ERC, a US$ 3.7 billion petroleum refinery that will help reduce by 50% Egypt’s present-day diesel imports, generate more than US$ 300 million in annual benefits to the state treasury, and reduce by nearly one-third the country’s present sulfur dioxide emissions.

“We see good opportunities as we look to grow our core investments but longer holding periods are definitely the order of the day. Whether it’s brownfields like RVR (our investment in the African railway sector which includes a five-year turnaround program) or greenfields like Nile Logistics (our river transport and logistics platform) and ERC, the holding periods in our corner of the woods for large-scale investments are necessarily longer than those traditionally preferred by many Western LPs, which creates a great opportunity for long-term investment companies, said ElEbiary.

The S&P Leaders Forum, now in its third year, is an annual invitation-only gathering that brings together leading members of the business community with senior government and regulatory figures to discuss timely and key economic issues in the Middle East.

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