The US’ Overseas Private Investment Corporation (OPIC) is offering guarantees to investors in a new $250 million Middle East and North Africa fund being set up by New York’s Siguler Guff & Company. The 10-year venture capital fund, which is expected to close in September, will channel investment into capitalstarved companies in Morocco, Tunisia, Egypt, Jordan and Gaza and the West Bank.
Investors will be required to take a 25 per cent equity stake in the fund, and 75 per cent in notes. OPIC has agreed to guarantee the principal and interest on the notes, which will be priced 75 basis points above the US treasury bills.
The fund is not planning to invest in the stock exchanges, but will focus on non-listed companies which work in the least regulated sectors of the economy.
‘We won’t consider projects unless we get returns of 30 per cent,’ says Mona Aboelnaga, the fund manager. ‘In most of these countries, company valuations are favourable. These companies are cheap compared to other emerging markets such as Indonesia.’ Tunisia’s Tunis Invest, Morocco’s Casablanca Finance Group, Egypt’s Investments & Securities Group and Jordan’s Cairo Amman Bank have been commissioned to identify investment opportunities for the fund in their respective countries.