Please tell us if your proposed solution aims to scale up through a high growth sector, expand immediately to multiple sectors, and/or scale up geographically
SME Private Equity: Our objectives to build local partnerships and private equity team should accelerate the development of an SME focused private equity industry across the MENA region.
Sectors of Interest: We will invest across sectors but have a particular interest in the following themes
Demographic Growth: The old silk road (MENA, India, Pakistan) will account for 35 % of global population growth between 2002 and 2050, to which Sub Sahara Africa will add another 35%. This will open new opportunities in volume industries such as: Financial Services, Telecom, Media, Consumer Goods, Retail, Automotive, Real Estate, Infrastructure, Healthcare and Education
The Emergence of a New Middle class: The Middle East & North Africa, India, Subs Sahara Africa will see a very large increase in Middle Class Consumers, which will create many opportunities across sectors such as Real Estate, Healthcare, Consumer Goods, Retail, Financial Services, Automotive, Education, Entertainment, etc.
Agriculture & Food: The MENA region accounts for more than 25% of cereals imports in the world compared to 21% in Asia and 18% in Latin America, where water scarcity is less acute. Food prices will increase in the coming years for various reasons including:
change in food consumption habits in new economies,
water scarcity, export bans in key food producing countries,
and potential political tensions between “family farms” and “highly mechanized (but less job intensive) industrial farms.
It will be important to make a better use of whatever resources are available in this sector because a combination of high food prices with high unemployment rate could be disruptive for the region.
Renewable Energy: Cars account for 95% of global oil consumption and the number of cars will boom in the coming years in line with the growth emerging markets. Since the oil production is not likely to increase under the same pace, oil prices will increase, which could be a barrier to development. Apart from geothermal energy, most renewable energy sources can not be profitable without subsidies many governments already are already facing growing financial pressures. Our only choices are to : a) invest in renewable energy projects that will reduce the break even cost of the associated technology, b) further expend renewable energy projects that can function without subsidies (geothermal), c) Invest in projects that will create a new approach to mobility and save energy.
The bottom of the pyramid (people making less than 2$ a day). 3.7 billions of consumers and entrepreneurs earn less than $8 a day and account for the “Bottom of The Pyramid”, a $2.3 trillion market growing at 8% per year. Many industries will appear to serve these consumers and entrepreneurs able to design, build and sell low priced products such as glasses at 2$.
Microfinance. Micro Finance and Growth Equity investment in micro entrepreneurs are much less developed in the MENA and Sub Sahara Africa regions than in Latin America or Asia. We are looking to back Microfinance Operators who will build Microfinance Institutions across the region. We believe that this industry could reach $6 to $9 billion of loans in the coming years in the MENA region.