Executing on its announced strategy to grow the Company’s AUM base, the transaction will foster the EFG Hermes position as the region’s biggest asset manager
EFG Hermes UAE Limited (“EFG Hermes” or the “Company”), a wholly owned subsidiary of EFG Hermes Holding S.A.E., has entered into definitive agreements to invest USD 21.5 million in Frontier Investment Management Partners Ltd (“FIM”). Established in 2008, FIM has grown over the past few years to become one of the region’s leading managers with USD 1.6 billion of assets under management (“AUMs”) and a management team with a stellar track record of investing client money. In order to achieve the targeted synergies from this investment, EFG Hermes will seek the consent of its clients to contribute its regional (non-Egypt related) portfolios and funds into FIM during the coming six months.
Commenting on the Transaction, EFG Hermes Group CEO Karim Awad said “Our investment in FIM is integral to our announced strategy of growing our asset management business through adding vital expertise, scale, and a more diversified product base that fits well within our frontier markets expansion strategy. As MENA and frontier markets grow, we believe that institutional investors will continue to seek specialized active fund managers with a strong on the ground knowledge of these markets. Through our investment in FIM, EFG Hermes has positioned itself as the manager of choice for those allocations.”
Following the investment, EFG Hermes will own 50% stake in FIM (the “Transaction”). The remaining 50% of FIM will continue to be held by its Founder and Chief Executive Officer Hedi Ben Mlouka (the “Partner”). The independence of the FIM management team will be maintained with Hedi Ben Mlouka retaining his position as Chairman and CEO. FIM will continue executing its current strategy of delivering unique returns to its institutional investor base. The shareholders have agreed to discuss the implementation of long-term incentive plans to ensure long-term alignment of interest and retention of key employees. FIM will join Egyptian Portfolio Management Group (“EPMG”), Hermes Fund Management (“HFM”) [both are Egypt based asset management entities], Vortex and Rx Healthcare as members of the EFG Hermes Asset Management businesses, while retaining its independence, brand name and autonomy in investing across regional and frontier capital markets. EFG Hermes will provide FIM with all the support (including seed- capital) it needs to execute on its business plan.
Karim Moussa, Head of Asset Management and Private Equity at EFG Hermes added “FIM is a unique manager with great track record in delivering superior investment returns. I am very happy that through this investment, EFG Hermes found a very strong partner in Hedi and the entire FIM team. I look forward to working with them on developing further their edge while offering the FIM current product portfolio through our growing network of regional and international institutional clients.”
Following the signature of the documentation, Hedi Ben Mlouka said “I am very excited to have EFG Hermes as my partner in FIM. As one of the MENA region’s most respected financial institutions, this will add significant institutional backing to FIM and a better reach to our investment universe via a strong regional footprint that has lately expanded to frontier markets. EFG Hermes asset management investment team is of very high caliber thereby adding a stronger foundation of expertise to the business as we pursue our selective growth plans.”
The Transaction has already been approved by the Dubai Financial Supervisory Authority. Following the completion of this Transaction, EFG Hermes will have USD 4.5 billion of public and private market AUMs.