Private-sector leaders in the world's emerging markets have compelling opportunities to invest in businesses that improve life for large swaths of the population, Hisham El-Khazindar told a Harvard University Arab Alumni Association panel
Hisham El-Khazindar urged Arab investors to look beyond the obvious to fund profitable enterprises that serve the “base of the pyramid,” the estimated 3.7 billion people around the world who are largely excluded from formal markets.
El-Khazindar, Co-Founder and Managing Director of Citadel Capital, the Middle East and North Africa’s leading private equity firm with US$ 8.3 billion in investments under control, joined Dr. Mahmoud Mohieldin, Egypt’s Minister of Investment and Dr. Bassem Awadallah, former minister and top advisor to King Abdullah of Jordan, on the Harvard Arab Alumni Association’s panel The Socioeconomics of Investment and Finance in the Arab World, part of the organization’s fourth annual Arab World Conference.
“The billions of individuals who claim the smallest pool of the world’s wealth represent, collectively, a rapidly-growing consumer market, an underutilized productive sector, and vast entrepreneurial energy,” El-Khazindar said at the Harvard University Arab Alumni Association’s gathering today in Cairo. “Engaging these billions as producers, consumers and entrepreneurs is critical to both reducing poverty and driving wider economic growth.”
World Economic Forum estimates suggest that those earning US$ 8 per day or less had an aggregate income of more than US$ 2.3 trillion in 2008 and could earn US$ 4 trillion annually by 2015 if growth rates remain steady.
“To private sector investors, this segment of the world population presents a unique challenge,” El-Khazindar continued. “It is an opportunity to craft business models that are scaled to achieve profitable returns across a wide, diverse market — and to significantly improve the income, livelihoods and access to goods and services of individuals facing dire circumstances.”
Citadel Capital has invested in businesses that serve the so-called base of the pyramid. TAQA Arabia, its Platform Company in the energy distribution sector, has connected some 700,000 Egyptian households to the national gas grid. Tanmeyah Micro Enterprise Services, a Portfolio Company of Finance Unlimited, which in turn is Citadel Capital’s Platform Company in financial services, will provide low and middle income groups with much-needed access to financing and financial services.
Citadel Capital is also investing heavily in regional food, agriculture, transportation and logistics projects whose business models are based on serving customers across the income spectrum.
Citadel Capital is the leading private equity firm in the Middle East and North Africa. The firm focuses on building platform investments throughout the region in select industries through acquisitions, turnarounds, and greenfields executed via Opportunity Specific Funds. Citadel Capital’s 19 OSFs now control Platform Companies with investments worth more than US$ 8.3 billion in 14 industries, including mining, cement, transportation, food and energy. Since 2004, the firm has returned more than US$ 2.2 billion in cash to investors, more than any other private equity firm in the region.
For more information, please contact:
Ms. Ghada Hammouda
Head of Corporate Communications,
Citadel Capital (S.A.E.)