EFG Hermes UAE Limited, a subsidiary of EFG Hermes Holding, has entered into definitive agreements to invest $21.5m in Frontier Investment Management Partners Ltd (FIM), according to a statement issued on Tuesday.
Established in 2008, FIM has $1.6bn worth of assets under management.
“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,” the company added.
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 specialised 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,” he added.
Following the investment, EFG Hermes will own a 50% stake in FIM.
The remaining 50% of FIM will continue to be held by its founder and CEO Hedi Ben Mlouka.
The independence of the FIM management team will be maintained with Hedi Ben Mlouka retaining his position as chairperson and CEO.
FIM will join Egyptian Portfolio Management Group (EPMG), Hermes Fund Management (HFM)—both of which are Egypt-based asset management entities—Vortex, and Rx Healthcare as a member 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 that “FIM is a unique asset manager with a great track record in delivering superior investment returns.”
The transaction has already been approved by the Dubai Financial Supervisory Authority.
Following the completion of this transaction, EFG Hermes will have $4.5bn of public and private market assets under management (AUM).