British International Investment

Ezdehar Mid cap Fund II

EgyptNorth AfricaConsumer - HealthConsumer - other services

This investment was made when British International Investment was named CDC Group.

Our investment

Description of the investment.

Our investment will put more capital to work in Egypt and support local private equity by backing a credible player able to provide finance and professional management to create productive employment and decent work for employees across Egypt. Our commitment will enable the fund to reach a viable first close.

Impact information

Applies to investments made from 2019 onwards. The tabs in this section define what we expect to achieve through the investment, assessing the potential impact of the investment against six dimensions of impact. You can find more details on our methodology of assessing impact here.

What?

Impact

Provide income generating opportunities through direct and indirect job creation (SDG 8.5)

How?

How?

Providing growth capital and value add to seven to eight SME/mid-cap businesses resulting in business growth, improved productivity and employment creation.

Who?

Stakeholder Geography Characteristics
Employees

Egypt

Likely to be low and medium skilled employees in sectors such as manufacturing and food & beverage, and higher-skilled in healthcare. c.80% expected to be deployed across consumer goods, non-banking financial services, food & beverage, healthcare, and manufacturing.

How much?

Scale Depth/Duration

Fund I currently has a 5% CAGR job creation rate which is comparable to median performance of 7% CAGR for CDC’s Africa funds. If this performance is delivered in Fund II, we can expect c.1,185 jobs to be created over the life of the Fund.

Improved HR is a key element of Ezdehar’s value add strategy. Previous Fund I investees delivered training programs, employee satisfaction surveys, and medical insurance and pension plan coverage, each of which can result in deeper impact.

Contribution/additionality

Contribution/additionality
  • Financial additionality: As anchor investor, our commitment will help the fund reach a viable fund size at 1st close. The investor base for this fund is still largely development finance institutions.
  • Value additionality: The fund manager has improved their environmental, social and business integrity functionalities through engagement with CDC on Fund 1. On Fund 2, we will support to focus on appointment of additional dedicated environmental and social resource and to formalise and increase business integrity capacity

Grid score

Grid Score

To help us direct our investments, we previously used a tool called the Development Impact Grid. It scored investments out of four, based on two factors: the difficulty of investing in a country and the propensity of the sector to generate employment. This tool was used for investments until the end of 2021. Since 2022 it has been replaced by the Impact Score.

2.7-2.8

Risk

Execution Risk
  • Relates to the probability that the fund fails to i) achieve its target fund size, ii) deploy capital at pace and scale expected, and iii) deliver returns attractive to commercial investors. Partially mitigated by backing an experienced top-quartile performer.
External Risk
  • Relates to probability that regardless of the fund’s financial performance, commercial investors will remain averse to investing in the SME/mid-cap Egyptian PE market segment. Market impact relies on repeated successes from multiple players and must be tolerated.

Environmental and social information

  • Environmental and social summary

    A high-level description of the environmental and social aspects of the investment. This may include a summary of key environmental and social risks identified during environmental and social due diligence (ESDD); key elements of an environmental and social action plan (ESAP); or ways in which we plan to support the investee improve environmental and social standards, such as through their environmental and social management system (ESMS); as well as any other priority areas agreed with the investee.

  • Environmental and social risk

    A risk category rating, which indicates the level of environmental and social risk associated with an investment. For an explanation of the categorisations used, see here. We consistently provide an environmental and social risk category for all investments screened from 2023 onwards.

Environmental and social summary

The fund manager has a well-established approach to environmental and social management and has closed all E&S Action items.

Reporting and Complaints Mechanism

The Reporting and Complaints Mechanism allows anyone outside BII to report alleged breaches of the business integrity or environmental and social provisions of BII’s Policy on Responsible Investing. This includes breaches made by BII, a BII investee, or a portfolio company of a fund in which BII has invested. The Reporting and Complaints Mechanism Rules are available here. Reports and complaints can be submitted by email to [email protected] or by mail. See more details on our Reporting and Complaints Mechanism here.

For any other general enquiries contact us at [email protected]

  • Key facts

    Last updated

    When the last quarterly update of the website database occurred.

    :
    March 2024
    Project number

    An identifier number shared by investments in the same project.

    :
    D4790
    Status

    The current status of the investment (green flag for active and red flag for exited).

    :
    Active
    Region

    The geographical region where the country is located. We currently invest in Africa, South Asia, South East Asia and the Caribbean. In 2023, BII’s investment mandate was extended allowing it to invest in regional funds linked to Ukraine, with the majority of activity expected to begin post-war. Investments outside these regions were made prior to 2012 under previous investment mandates.

    :
    North Africa
    Sector

    We prioritise those sectors that facilitate development and need our capital the most. Our priority sectors contribute towards many of the Sustainable Development Goals. They range from investing in the power infrastructure that will provide people with better access to electricity, to investing in financial institutions that direct capital to the individuals and businesses that need it the most.

    :
    Consumer - Health, Consumer - other services

    We provide capital in the following ways: directly – through direct equity, direct debt, guarantees and other non-intermediated financial instruments; and indirectly – principally through investment funds.

    For direct investments and fund investments, this is the date BII committed capital to the investments. This is typically the date on which legal agreements are signed by all parties.

    For the portfolio companies of our fund investments, this is the date (either the month or the quarter) on which the fund committed capital to the portfolio company.

    For direct equity investments, this is the date at which British International Investment exited the investment.

    For debt investments, this is the date at which the final debt repayment was made.

    For funds, this is the date at which the fund was terminated.

    For underlying fund investments, this is the date at which the fund manager exited the investment.

    The total amount committed, per financial instrument, per investment, on the date BII becomes subject to a binding legal obligation to provide funding or assume a contingent liability. This information is provided in US dollars.

    For direct investments, this is the amount that BII has committed to the business or project. For fund investments, this is the amount BII has committed to the fund.

    The currency in which the investment was made.

    Investment type :
    Fund
    Start date :
    December 2021
    Amount :
    $25m
    Currency of investment :
    USD
    Fund Manager:
    Ezdehar Management B.V.
    Domicile

    The company or investment fund’s place of incorporation.

    :
    Netherlands

Investments made by this fund into companies:

For further information about these companies, visit http://www.ezdehar.com/

Investment name Country Region Sector Start date Status
SETA Textiles SAE Egypt North Africa Consumer - other services December 2023 Active
Yodawy Inc Egypt North Africa Consumer - Health December 2023 Active
Zahran Market S.A.E., Project Lighthouse Egypt North Africa Consumer - other services August 2022 Active

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