Private Equity Thinking In Egypt's Public Markets – Yasser El Halaby

You said you don't have to deploy capital, but you wait and you sometimes take years.

Can you flesh that out for me a bit more? So why that approach and what does it look like in practice?

Yeah, absolutely.

I mean, first and foremost, we're not sector-focused.

We don't have specific sector expertise, although the investments we've done in the past have typically fallen within healthcare and financial services.

But There is quite of a learning curve getting to know a company, a management team, and an industry.

So when we look at an investment, really divide them into five main buckets.

The first and foremost is alignment with the leadership and the management team to execute.

And the ability, if we feel like we need to hire a new management team, then how effective we can be to put in place a management team that can take the company to the next level.

The second thing we obviously assess is mispriced risk.

It's another way to really frame conversations about valuation.

But the questions we ask ourselves is, what do we see that others don't see? Or what do we see that others don't appreciate as much? And from there, you can really identify valuation gaps that we can capitalize on.

So sometimes companies and industries are very attractive and very hot.

and that might drive valuations upwards.

We try and wait and have our entry point at a time where valuations are attractive.

The third thing to look at is structural advantages.

So what are the competitive strengths does the company have? How difficult are those to replicate? Whether that could be on the manufacturing side, on the commercial side, but really try to identify structural advantages that are difficult to replicate and are differentiated in the targets we look at.

From a private equity perspective, our DNA also is to raise value post-investment.

So we identify operational enhancements.

A lot of times those given where financial people entail financial restructuring, organizational restructuring, but also we try and find ways to boost growth.

And often that tends to be through M&A, M&A roll-up strategies, and so on.

That is a very effective way to create value in the private markets.

And then finally is the market and industry tailwinds.

So all of what I said was all good, but it's really helpful if the market you're in and the sector you're in is moving in a positive direction.

That really helps.