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
Research
Number of employees
Approx. 800 (2015)
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. EFG Hermes serves a range of clients including sovereign wealth funds, endowments, corporations, financial institutions, high-net-worth clients and individual 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, Jordan and Lebanon with over 800 people from 25 nationalities. They serve clients from the Middle East, North Africa, Europe and the United States.EFG Hermes owns a 63.7% majority stake in the Lebanese commercial bank, Credit Libanais.

In FY 2014, EFG Hermes reported net profit after tax and minority interest of EGP 538 million; on total operating revenues of EGP 2.6 billion, the Group’s strongest performance since 2008. Fee and commission revenue from the investment bank rose 44% Y-o-Y to EGP 951 million in FY 2014, largely due to higher revenue generated from regional operations for the Securities Brokerage, Asset Management and Investment Banking divisions, with regional operations representing 51% of fees and commission revenues.[2]

In 2015, EFG Hermes launched EFG Hermes Leasing, a wholly owned subsidiary of the firm specializing in providing leasing services to large corporates and SMEs across Egypt. EFG Hermes Leasing specializes in offering comprehensive financial leasing solutions and advisory to corporations and SMEs. The company also works with vendor partners.

History[edit]

EFG, also known as the Egyptian Financial Group, became the first investment banking firm in Egypt when it was established by Dr Mohamed Taymour in1984. 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.[citation needed] 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.

Karim Awad CEO and Board Member[edit]

Karim Awad is Chief Executive Officer and a member of the board of EFG Hermes Holding. Since assuming leadership of the firm in 2013, Awad has led EFG Hermes’ return to profitability by cutting unwarranted expenses, selling non-core assets and distributing excess cash to shareholders. Starting 2014, Awad worked across the Company’s different divisions in building a comprehensive regional advisory pipeline; extending its leadership as the Arab World’s largest securities brokerage; continuing to lead competition in like-for-like rankings as an asset manager; and refocusing private equity business; and continuing to provide the region’s most comprehensive research offering.

By the beginning of 2016, Awad also redirected the company into a new strategic shift based on an extended geographic presence to transform EFG Hermes from a MENA house into a finance corporation with access to frontier markets. He also initiated an increased emphasis on product diversification in the company’s traditional business lines as well as through the creation of a parallel non-bank finance platform, EFG Hermes Finance in the year 2015.

Prior to assuming his current role, 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.

Awad has a long track record advising major corporations on equity offerings and M&A transactions and was key 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.[citation needed]

Structure[edit]

EFG Hermes has five Divisions and two subsidiaries under its finance platform

Securities Brokerage[edit]

EFG Hermes Securities Brokerage is the leading brokerage house in the Arab world.[citation needed] With the region’s largest brokerage team, the division caters to an extended spectrum of investors including foreign, local and Gulf institutions as well as individual, VIP, high-net-worth individuals and family offices. The division’s products and services range from trading services including phone trading, online trading, SWAP/P-Note products trading and margin lending for Egyptian retail investors.

Asset Management[edit]

EFG Hermes Asset Management serves a client base that includes sovereign wealth funds, endowments, foundations, multinational corporations and family offices. The division employs professionals in portfolio management, trading, research, compliance and risk across its 3 locations in Egypt, UAE (Dubai) and Saudi Arabia. The division has consistently delivered superior returns across its broad and diverse product spectrum.[3]

Private Equity[edit]

EFG Hermes Private Equity is a private equity house, with a presence in Cairo and Dubai. The division is focused on attractive investment opportunities that capitalise on different opportunities in and outside the MENA region.[citation needed] EFG Hermes Private Equity advised InfraMed, the largest investment vehicle dedicated to infrastructure investments in the Southern and Eastern Mediterranean. The firm was also one of five global and regional founding sponsors that together contributed EUR 385 million to establish InfraMed. In late 2014, EFG Hermes launched Vortex - its renewable energy vehicle - to invest in solar and wind energy projects across Europe and Asia.[citation needed]

Investment Banking[edit]

EFG Hermes Investment Banking is an advisor for major M&A, debt and equity transactions. The division’s investment professionals have advised on cross-border transactions in the region through a distribution network that encompasses more than 102,000 investors across North America, Europe, the Middle East and Africa. The Investment Banking team has completed some US$53 billion in M&A transactions since 1995 while raising more than US$19 billion through initial public offerings, rights issues, secondary offerings and private placements in the same period.[citation needed]

Research[edit]

EFG Hermes Research division offers its clients coverage of MENA markets, including more than 150 companies representing c. 60% of the region’s aggregate market capitalisation. The team offers economics and strategy coverage of 11 key countries in the Arab world. Products include equity research, strategy and macro-strategy notes, sector overviews, economic notes, industrial research and country-specific economic and banking data reports.[citation needed]

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 City. 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 Capital Market Authority (Saudi Arabia) (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.[4]

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[citation needed] and has market share of 9.2% and net profit after tax of US$2.6 million as of end 2007.[citation needed]

Kuwait[edit]

EFG Hermes IFA, the brokerage arm of EFG Hermes in Kuwait, is a brokerage firm on the Kuwait Stock Exchange (KSE) with a client base including a wide array of retail, VIP and high-net-worth clients, as well as local, regional, and international institutional investors. EFG Hermes IFA provides the full range of brokerage services including an online trading platform. The firm has maintained its position as one of the top two brokerage firms in Kuwait.[citation needed]

References[edit]

  1. ^ Thomas, Landon (9 December 2014). "An Investment Bank Revives Along With Egypt". The New York Times. Retrieved 18 April 2015. 
  2. ^ "Earnings Releases". EFG Hermes. 2015-08-11. Retrieved 2015-11-12. 
  3. ^ "EFG Hermes appoints asset management head | 1 October 2013". Stock Market Wire. 2013-10-01. Retrieved 2015-11-12. 
  4. ^ https://web.archive.org/web/20120903201415/http://www.efg-hermes.com/English/Showpage.aspx?pageid=202. Archived from the original on September 3, 2012. Retrieved October 20, 2013.  Missing or empty |title= (help)

External links[edit]