| Industry | Investment services |
|---|---|
| Headquarters | Egypt, United Arab Emirates, Kingdom of Saudi Arabia, Qatar, Oman |
| Products | Brokerage Asset Management Investment Banking Private Equity |
| Net income | $232 million USD (2007) |
| Employees | Approx. 800 (2008) |
| Website | http://www.efg-hermes.com |
EFG-Hermes is an investment bank in the Middle East and North Africa (MENA) region and specializes in securities brokerage, asset management, investment banking, private equity and research. It serves a range of clients including governments, corporations, financial institutions, high net worth individuals and retail customers. EFG-Hermes is listed on the Egyptian Exchange (EGX) and London (LSE) stock exchanges. EFG-Hermes has offices in Egypt, the United Arab Emirates (UAE), the Kingdom of Saudi Arabia (KSA), Qatar, Oman, Kuwait and Lebanon with over 850 people from 30 nationalities. They serve clients from including the Middle East, North Africa, Europe and the United States.
In FY 2007, its market capitalization exceeded USD 4.6 billion, shareholder's equity was USD 1.7 billion and net profit grew by 89% to USD 232 million. EFG-Hermes is the largest shareholder in Bank Audi, one of the region’s leading banks, with a stake exceeding 28%.
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EFG, also known as the Egyptian Financial Group, became the first investment banking firm in Egypt when it was established 1984. Hermes was founded in 1993 under the newly promulgated Capital Markets Law 95. EFG created and analyzed privatization plans for the Egyptian government for several years. In 1993, The Egyptian Financial Group and Hermes independently made a move into securities brokerage. The two companies competed and both companies brought many investment strategies that were common to the west to Egypt as several of the two firm's founders had Wall Street experience in corporate finance, sales & trading and asset management;, for example Hermes established the first equity index in all of Egypt.
In 1994, both Egyptian Financial Group and Hermes entered into asset management. Fueled by organic growth; the two firms also accounted for lead managing a majority of the privatization capital markets IPO's during 1995 and 1996. The two companies soon reached the point that further growth was not possible without a wider network of local and international clients on one hand, as well as the rising competitive threat of international investment banks in the progressively more active Egyptian market in terms of investment baking privatization transactions as well as higher trading volumes . These factors led to a merger in 1996 between EFG and Hermes.
Mr. El Mallawany is CEO of EFG-Hermes Holding Company and chairman of EFG-Hermes Private Equity. He is also chairman of ACE General and ACE Life Insurance, member of the Policies High Committee of the National Democratic Party, board member of the National Investment Bank, and member of the Advisory Council of the Emerging Markets Private Equity Association (EMPEA), USA and treasurer of the American Chamber of Commerce in Egypt.
Mr. El Mallawany has played a major role in the consolidation of the investment banking sector in Egypt, facilitating the emergence of EFG-Hermes as the Arab regions most prominent investment bank. He began his career with Commercial International Bank (CIB), formerly Chase National Bank, where he has worked for 16 years, culminating in the position of General Manager of the Corporate Banking division.
Mr. Heikal joined EFG-Hermes in 1995 from Goldman Sachs, where he served in the Corporate Finance Division. He is credited with the growth of EFG-Hermes, particularly into new markets. Under his leadership, the group has advised clients such as Vodafone plc, Sainsburys, Heineken, PepsiCo, Orascom Telecom, Pirelli and Bayer. Mr. Heikal was also instrumental in pushing EFG-Hermes acquiring the stake in Bank Audi in 2006.
EFG-Hermes has four Divisions
Securities Brokerage facilitates transactions for institutions, high net worth individuals and retail clients in all the major MENA markets. For many years EFG-Hermes has held a high position as a securities broker on the Cairo and Alexandria stock exchange (CASE) and has maintained the #1 position in the UAE. In KSA, the brokerage arm reached the #2 position among the 9 independent brokerage companies.
Asset Management offers a broad range of investment series to retail, institutional and high net worth investors. Currently the Asset Management team manages 21 funds covering various countries, strategies and sectors including Islamic funds, Money Market funds, Equity and Capital Guaranteed funds. Total Assets under Management are currently above US$ 7.6 billion.
Private Equity provides alternative investment opportunities for high net worth individuals and large institutional investors, who invest in a broad range of sectors, including industrial, real estate, retail, agriculture and telecommunications. Currently private equity manages six funds exceeding US$ 1 billion, in addition to the firm’s proprietary investments.
Investment Banking covers public and private transactions including mergers and acquisitions, restructuring, privatization and advisories on the issuance of equity and debt financing. Major international clients include American Express, Bayer, Etisalat, GlaxoSmithKline, HSBC, Kraft Foods, MTC, Nestlé, Orascom and PepsiCo. Major regional clients include Arafa Holding, Du, Elsewedy Electric, MIBank, NSGB, Olympic Group, Oriental Weavers, Telecom Egypt and Thuraya. EFG- Hermes is the only investment bank to have advised multiple governments in the region – Egypt, UAE, Saudi Arabia and Jordan.
The Research department provides high quality, independent research on nearly 90 companies in the MENA region as well as Strategy and Economics notes on 10 countries in the region.
EFG-Hermes global strategy relies heavily on expanding in the MENA region. Therefore, the company has made its priority to enter into the major financial hubs of the Middle-East, namely Egypt, the United Arab Emirates, Saudi Arabia, Qatar, Oman, Kuwait and Lebanon.
EFG-Hermes launched its brokerage activities in the UAE in early 2005, and by early 2007 had captured dominant market share on Dubai Financial Market. The firm is also within the top two ranked brokers on the Abu Dhabi Securities Market. EFG-Hermes Brokerage UAE has branches in Dubai, Abu Dhabi, Ras Al Khaimah and Al Ain.
In December 2005, EFG-Hermes was granted a license to conduct asset management and investment banking activities from the Dubai International Financial Centre (DIFC). EFG-Hermes UAE is regulated in this capacity by the Dubai Financial Services Authority (DFSA), an independent regulatory authority that operates to the standards of major financial centers such as London and New York. Out of Dubai, the firm manages the region’s top performing funds and has closed a number of landmark investment banking transactions. In February 2006, EFG-Hermes UAE was also granted a license to conduct brokerage activities from within the DIFC and became the first regional trading, clearing and custody member of the Dubai International Financial Exchange (DIFX), its wholesale exchange.
EFG-Hermes was granted a license from the Saudi Capital Market Authority (CMA) to launch its operations in the Kingdom of Saudi Arabia in March 2007 offering securities brokerage, investment banking, asset management and research services in the largest investment market in the region. The brokerage arm reached the #1 position among the 12 independent brokerage companies, despite having started trading properly only in 3Q 07.
EFG-Hermes established its business in Qatar at the end of 2007 having been granted a license by the Qatar Financial Centre Authority (QFCA) for investment banking and asset management business.EFG-Hermes Qatar is a joint venture, fully managed and 51% owned by EFG-Hermes and is capitalized at USD 37 million.
In April 2008, EFG-Hermes acquired 51% of Vision Securities Co. LLC in Oman at a PE ratio of 11.5 compared to EFG-Hermes’ PE ratio of 16.6.EFG-Hermes has long since accounted for substantial flows into the Omani market on behalf of its foreign institutional clients, and is now able to serve a broader base of clients from its presence on the ground in Oman.
Now a member of the EFG-Hermes Group, Vision Securities is one of Oman’s leading local brokers and has market share of 9.2% and net profit after tax of USD 2.6 million as of end 2007.