In line with its strategy to expand its asset management business, EFG Hermes, the Egyptian investment bank, is paying $21.5 million for a 50% stake in Frontier Investment Management Partners or FIM Partners, a Dubai-registered asset manager with $1.6 billion in assets.
The deal, which is being executed via the investment bank’s subsidiary EFG Hermes UAE Ltd., raises the value of EFG’s public and private market assets under management to $4.5 billion. In order to realize some of the synergies promised by the deal, EFG plans seek client consent over the next six months to roll over its regional, non-Egyptian, portfolio and funds into FIM Partners.
FIM Partners, which will continue to be led by its Founder and Chief Executive Officer, Hedi Ben Mlouka, will retain its autonomy and brand as its invests in regional and frontier markets. It will report into EFG Hermes’ Asset Management Business, whose members include Egyptian Portfolio Management Group and Hermes Fund Management, both Egypt-based asset management firms.
On the fifth anniversary of the transaction, EFG Hermes will have a call option on an additional 30% stake in FIM, with Hedi Ben Mlouka, who will own the remaining 50% of the firm having a corresponding put option. The exercise price of the options will be determined by the firm’s profitability at that time.
EFG Hermes UAE received legal advice for the transaction from Shearman & Sterling.