Arab Spring on Track to Create Opportunities for Private Equity in MENA

Renewed interest from international limited partners for compelling opportunities in the Middle East and North Africa

The co-founder of Africa’s largest private equity firm told a gathering of global private equity leaders in Washington, DC, that the Arab Spring will ultimately help reinforce the macroeconomic fundamentals that made the Middle East and North Africa one of the world’s fastest-growing regions prior to January 2011.

“MENA is still among the fastest-growing consumer markets in the world, and exporters there remain ideally suited to cater to the needs of key global markets. What’s more, governments will be prompted by balance sheet constraints in the period ahead to rely on the private sector to help meet the aspirations of more than 350 million people,” said Hisham El-Khazindar, Managing Director and Co-Founder of Citadel Capital, the leading private equity firm in the Middle East and Africa with US$ 9.5 billion in investments under control.

What has changed, El-Khazindar noted, are the scale and nature of the region’s long-term opportunities.

“Despite the economic and political turbulence arising from prolonged transition periods, the course is clear: As governments shift towards more democratic systems, transparency will increase, economies will be run more efficiently, corruption will be reduced, and subsidies will be better directed under the scrutiny of elected parliaments. If 3-5% economic growth was the norm before, 6% or more could be the new normal post the Arab Spring,” El-Khazindar said at an opening panel discussion entitled ‘MENA Investing After the Arab Spring’ at the Fourteenth Annual Global Private Equity Conference of the International Finance Corporation and Emerging Markets Private Equity Association (EMPEA).

Moreover, he noted, “The frontrunners in Egypt’s upcoming presidential election, irrespective of their political orientations, share similar economic views on the centrality of market economics and the role of the private sector. However, growth will need to be more balanced, with the private sector and private equity investors playing a more socially responsible role. The ongoing transition to democracy has thrust the role of the private sector to the forefront in many ways.

“Ultimately, the Arab Spring will create new opportunities for private equity investors who have clearly articulated investment themes, the entrepreneurial spirit needed to build or turnaround businesses that can be transformed into regional champions, and a willingness to put their own capital on the line as substantial principal investors. MENA remains a proven international market for limited partners seeking to lock-in their chances of significant returns,” El-Khazindar noted.

Despite fallout from the Arab Spring, Citadel Capital raised nearly three quarters of a billion dollars in third-party international equity and debt in 2011, with substantial sums having been committed by leading institutional LPs including the United States Overseas Private Investment Corporation (OPIC), the International Finance Corporation, the European Investment Bank, Germany’s DEG and KfW, the Netherlands’ FMO, France’s PROPARCO, the African Development Bank, the ICF Debt Pool and the Belgian Investment Company for Developing Countries, among others.

“While many traditional LPs remain on the sidelines, European development finance institutions, Asian export credit agencies, Gulf investors including sovereign wealth funds, and impact investors such as the United States Overseas Private Investment Corporation have stepped up and are investing at the portfolio level,” El-Khazindar noted.

“Fundraising appetite of this type makes it crystal clear: Institutional LPs are willing to invest alongside credible local GPs with proven investment themes that present plays on government deregulation / pullback, infrastructure with PE returns, natural advantages / resources and the region’s compelling demographics.

“Make no mistake about it: We have not emerged from the Arab Spring. But when we do, we will be looking at MENA in much the same way as we looked at Eastern Europe following the fall of the Berlin Wall,” he concluded.


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 control Platform Companies with investments of US$ 9.0 billion in 15 countries spanning 15 industries, including mining, cement, transportation, food and energy. Since 2004, Citadel Capital has generated more than US$ 2.2 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 (2006-2011, as ranked by Private Equity International). For more information, please visit

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