EFG-Hermes

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EFG Hermes
Industry Investment services
Headquarters Egypt, United Arab Emirates, Kingdom of Saudi Arabia, Qatar, Oman
Key people
Karim Awad, CEO & Board Member
Mona Zulficar, Chairperson[1]
Products Brokerage
Asset Management
Investment Banking
Private Equity
Increase$232 million USD (2007)
Number of employees
Approx. 800 (2008)
Website http://www.efg-hermes.com

EFG Hermes is an investment bank in the Middle East and North Africa (MENA) region and specializes in securities brokerage, asset management, investment banking, private equity and research. It serves a range of clients including governments, corporations, financial institutions, high-net-worth individuals and retail customers. EFG-Hermes is listed on the Egyptian Exchange (EGX) and London (LSE) stock exchanges. EFG-Hermes has offices in Egypt, the United Arab Emirates (UAE), the Kingdom of Saudi Arabia (KSA), Qatar, Oman, Kuwait and Lebanon with over 850 people from 30 nationalities. They serve clients from including the Middle East, North Africa, Europe and the United States.

In FY 2007, its market capitalization exceeded USD 4.6 billion, shareholder's equity was USD 1.7 billion and net profit grew by 89% to USD 232 million. EFG-Hermes is the largest shareholder in Credit Libanais group for 65% after selling his stake of 28% with Bank Audi in 2010.

History[edit]

EFG, also known as the Egyptian Financial Group, became the first investment banking firm in Egypt when it was established 1984. Hermes was founded in 1993 under the newly promulgated Capital Markets Law 95. EFG created and analyzed privatization plans for the Egyptian government for several years. In 1993, The Egyptian Financial Group and Hermes independently made a move into securities brokerage. The two companies competed and both companies brought many investment strategies that were common to the west to Egypt as several of the two firm's founders had Wall Street experience in corporate finance, sales & trading and asset management;, for example Hermes established the first equity index in all of Egypt.

In 1994, both Egyptian Financial Group and Hermes entered into asset management. Fueled by organic growth; the two firms also accounted for lead managing a majority of the privatization capital markets IPO's during 1995 and 1996. The two companies soon reached the point that further growth was not possible without a wider network of local and international clients on one hand, as well as the rising competitive threat of international investment banks in the progressively more active Egyptian market in terms of investment baking privatization transactions as well as higher trading volumes . These factors led to a merger in 1996 between EFG and Hermes.

Management[edit]

Mona Zulficar, Chairperson[edit]

Ms. Zulficar has served as Non-Executive Chairperson of EFG Hermes since 2008. She is one of the founding partners of Zulficar & Partners Law Firm, a specialized law firm of eight partners and over 35 associates, which was established in June 2009 and grew into one of the best ranked law firms in Egypt. She was previously senior partner at Shalakany Law Firm and Chair of its Executive Committee for many years.

Ms. Zulficar is recognized in local and international legal circles as the precedents maker and one of Egypt’s most prominent corporate, banking and project finance attorneys. As an M&A and capital markets transactions specialist, she has led negotiations on some of Egypt’s and the Middle East’s largest and most complex successful transactions over the past three decades. [2]

Karim Awad CEO and Board Member[edit]

Mr. Awad is CEO and Board Member of EFG Hermes. Since assuming leadership of the firm in 2013, Mr. Awad has led EFG Hermes’ return to profitability by building a comprehensive regional advisory pipeline.

Prior to assuming his current role, Mr. Awad was Chief Executive Officer of the Investment Banking platform with an overall responsibility for managing the firm’s Investment Banking, Securities Brokerage, Research, Asset Management, and Private Equity divisions. Earlier he was head of Investment Banking, having joined the division in 1998. Mr. Awad has a long track record advising major corporations on equity offerings and M&A transactions and was instrumental in the development of EFG Hermes’s debt advisory practice. During his tenure in the Investment Banking division, he led and closed transactions with an aggregate value of more than USD 40 billion.

Structure[edit]

EFG-Hermes has five Divisions

Securities Brokerage[edit]

Securities Brokerage facilitates transactions for institutions, high-net-worth individuals and retail clients in all the major MENA markets. For many years EFG-Hermes has held a high position as a securities broker on the Cairo and Alexandria stock exchange (CASE) and has maintained the #1 position in the UAE. In KSA, the brokerage arm reached the #2 position among the 9 independent brokerage companies.

Asset Management[edit]

Asset Management offers a broad range of investment series to retail, institutional and high-net-worth investors. Currently the Asset Management team manages 21 funds covering various countries, strategies and sectors including Islamic funds, Money Market funds, Equity and Capital Guaranteed funds. Total Assets under Management are currently above US$7.6 billion.[citation needed]

On 1 October 2013, EFG Hermes appointed industry veteran Amr Seif as head of the firm's asset management division.[3]

Private Equity[edit]

Private Equity provides alternative investment opportunities for high-net-worth individuals and large institutional investors, who invest in a broad range of sectors, including industrial, real estate, retail, agriculture and telecommunications. Currently private equity manages six funds exceeding US$1 billion, in addition to the firm’s proprietary investments.

Investment Banking[edit]

Investment Banking covers public and private transactions including mergers and acquisitions, restructuring, privatization and advisories on the issuance of equity and debt financing. Major international clients include American Express, Bayer, Etisalat, GlaxoSmithKline, HSBC, Kraft Foods, MTC, Nestlé, Orascom and PepsiCo. Major regional clients include Arafa Holding, Du, Elsewedy Electric, MIBank, NSGB, Olympic Group, Oriental Weavers, Telecom Egypt and Thuraya. EFG- Hermes is the only investment bank to have advised multiple governments in the region – Egypt, UAE, Saudi Arabia and Jordan.[citation needed]

Research[edit]

The Research department provides high quality, independent research on nearly 90 companies in the MENA region as well as Strategy and Economics notes on 10 countries in the region.

Strategy[edit]

EFG-Hermes global strategy relies heavily on expanding in the MENA region. Therefore, the company has made its priority to enter into the major financial hubs of the Middle-East, namely Egypt, the United Arab Emirates, Saudi Arabia, Qatar, Oman, Kuwait and Lebanon.

United Arab Emirates[edit]

EFG-Hermes launched its brokerage activities in the UAE in early 2005, and by early 2007 had captured dominant market share on Dubai Financial Market. The firm is also within the top two ranked brokers on the Abu Dhabi Securities Market. EFG-Hermes Brokerage UAE has branches in Dubai, Abu Dhabi, Ras Al Khaimah and Al Ain.

In December 2005, EFG-Hermes was granted a license to conduct asset management and investment banking activities from the Dubai International Financial Centre (DIFC). EFG-Hermes UAE is regulated in this capacity by the Dubai Financial Services Authority (DFSA), an independent regulatory authority that operates to the standards of major financial centers such as London and New York. Out of Dubai, the firm manages the region’s top performing funds and has closed a number of landmark investment banking transactions.[citation needed] In February 2006, EFG-Hermes UAE was also granted a license to conduct brokerage activities from within the DIFC and became the first regional trading, clearing and custody member of the Dubai International Financial Exchange (DIFX), its wholesale exchange.[citation needed]

Kingdom of Saudi Arabia[edit]

EFG-Hermes was granted a license from the Saudi Capital Market Authority (CMA) to launch its operations in the Kingdom of Saudi Arabia in March 2007 offering securities brokerage, investment banking, asset management and research services in the largest investment market in the region. The brokerage arm reached the #1 position among the 12 independent brokerage companies, despite having started trading properly only in 3Q 07.[citation needed]

Qatar[edit]

EFG Hermes established its business in Qatar at the end of 2007 having been granted a license by the Qatar Financial Centre Authority (QFCA) for investment banking and asset management business. http://www.efg-hermes.com/English/Showpage.aspx?pageid=202

Oman[edit]

In April 2008, EFG-Hermes acquired 51% of Vision Securities Co. LLC in Oman at a PE ratio of 11.5 compared to EFG-Hermes’ PE ratio of 16.6.EFG-Hermes has long since accounted for substantial flows into the Omani market on behalf of its foreign institutional clients, and is now able to serve a broader base of clients from its presence on the ground in Oman.

Now a member of the EFG-Hermes Group, Vision Securities is one of Oman’s leading local brokers and has market share of 9.2% and net profit after tax of USD 2.6 million as of end 2007.

References[edit]

  1. Abraaj Capital. Investor Relations. Retrieved September 28, 2006, from http://abraaj.com
  2. Arab Decision, Egypt, other Financial Institutions. Retrieved September 28, 2006, from http://www.arabdecision.org/show_funcprint.php
  3. Atlas Investment Group. Jordan Country Report. Retrieved October 3, 2006.
  4. Ameinfo. UAE retail investors moving online as market grows. Retrieved September 14, 2006, from http://www.ameinfo.com/88697.html
  5. American University. Sources and links. Retrieved September 1, 2006, from http://www.american.edu/inteb/zt9072.htm
  6. Bank Audi. Jordanian Economic Report. Retrieved August 29, 2006, from http://www.audi.com.lb
  7. Center for administrative Innovation in the Euro-Mediterranean Region. Jordan Administrative Reform, Innovation and Maintenance. Retrieved August 29, 2006, from http://caimed.org
  8. Central Intelligence Agency (2004). The World Fact Book. Retrieved on October 3, 2006 from https://www.cia.gov/library/publications/resources/the-world-factbook/geos/print/country/countrypdf_jo.pdf
  9. EFG-Hermes. Investor Relations. Retrieved on September 14, 2006, from http://www.EFG-Hermes.com
  10. Library of Congress, Federal Research Division, Country Studies. Jordan. Retrieved October 3, 2006, from lcweb2.loc.gov/cgi-bin/query/r?frd/cstdy@field(DOCID+jo0045)
  11. Moussa Najla. Abraaj Capital makes offer on EFG-Hermes Shares. Retrieved
  12. November 20, 2006, from http://www.dailystaregypt.com/artical/aspx??ArticalID=2469
  13. The Heritage Foundation. 2006 Index of Economic Freedom: Jordan. Retrieved August 29, 2006, from http://heritage.org/research/features/index/country.cmf?id=Jordan
  14. Saban Center for Middle East Policy. Luncheon Address: Suhair Al-Ali. Retrieved October 17, 2006, from Miller Reporting Co.