Karim Sadek, Managing Director at Africa's largest private equity firm, says regional integration and financial sector advances are set to spark a new era of business growth across East Africa
A widespread commitment to regional integration and innovative approaches to financing and capital-raising challenges are set to transform East Africa’s business climate, Karim Sadek, Managing Director of Citadel Capital (CCAP.CA on the Egyptian Exchange) told business and government leaders at the 2011 Africa Investment Forum in Dar es Salaam. Sadek spoke as part of panel entitled Improving Access to Finance: Capital Markets, Banking and Financial Services for Business.
“Today, we are seeing a new interest in East Africa’s opportunities as sophisticated investors work closely with regional governments and multilateral organizations to creatively finance and build the continent’s economic infrastructure,” Sadek said. “The challenges that prevented development in the past are being overcome with unique collaboration, a commitment to transparency and good management and significant investment by those who believe in Africa’s bright future.”
Cairo-based Citadel Capital, with US$ 8.6 billion in investments under control across 14 countries, is leading this new breed of African investors who are building core industrial capacity and economic potential. The firm has exposure to non-Egyptian Africa in industries including mining, oil and gas, electricity generation, cement, banking, agriculture, agrifoods, and transportation and logistics. Among Citadel Capital’s most recent investments in Africa were its acquisition of a majority stake in Rift Valley Railways of Kenya-Uganda, the founding of greenfield operator Nile Valley Railways in Sudan, and the signing of a 30-year land lease for El-Nahda for Integrated Solutions, which is building Sudan’s first commercial rice farm.
The 2011 Africa Investment Forum from April 17-19 focuses on efforts to accelerate African investment by better integrating the East African Community, Africa and the world.
“Citadel Capital sees strong potential in the Common Market for Eastern and Southern Africa (COMESA), the 19 nation agglomeration of countries that are cooperating to eliminate customs barriers and other trade issues,” Sadek told the audience in Dar es Salaam. “The five-country East African Union is also now a full customs union, and these types of regional initiatives are creating bigger markets, and when we create bigger markets we can create larger companies. What is happening now in Africa is similar to the development of the Europe Union, where idiosyncrasies that prevented smooth import-export trade were eliminated.”
Sadek also noted that local securities markets and other financial networks can in the future play an important role in easing capital flows in the region. “Today financial markets in East Africa are still lacking in depth with insufficient market caps and levels of liquidity but in time I think they will develop individually and perhaps even merge at a later stage, especially as an increasing number of African securities exchanges are electronic,” Sadek said. “The key issues are critical mass and transparency – factors that we hope to see gradually developing.”
Citadel Capital (CCAP.CA on the Egyptian Stock Exchange) is the leading private equity firm in the Middle East and Africa. Citadel Capital focuses on building regional platforms in select industries through acquisitions, turnarounds, and greenfields executed via Opportunity-Specific Funds. The firm’s 19 OSFs now control Platform Companies with investments worth more than US$ 8.6 billion in 14 countries spanning 15 industries, including mining, cement, transportation, food and energy. Since 2004, Citadel Capital has generated more than US$ 2.5 billion in cash returns to its co-investors and shareholders (on investments of US$ 650 million), more than any other private equity firm in the region. Citadel Capital is the largest private equity firm in Africa by PE assets under management (2005-2010, as ranked by Private Equity International). For more information, please visit www.citadelcapital.com.
For more information, please contact:
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Citadel Capital (S.A.E.)
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