Asset management in Egypt is in its early stages – Waha Portfolio Management
“The asset management business in Egypt is not very familiar. It has a lot of potential to expand over the coming years, because it is very small, but it is growing rapidly, but it is still in its early stages. The growth in assets in the company has a very high percentage. Since the last 3 to 4 years, some companies have grown by 50 % to 70% percent annually.”
Interview with Yasser Darwish, Chairman of Waha Portfolio Management
Your company Waha is involved in Portfolio and asset management. Please give us a general evaluation of the capital market in Egypt and its current performance.
After the second revolution, the market has been giving very handsome returns for our investors. There has been a more than 100% profit in revenue. There has been a revival of some investments from the Gulf area and the Europe and the States. If you have been following the progress of the Egyptian market, you will have noticed that we suffered a lot during the regime of the President Morsi. Things have changed dramatically after he was asked to step down. We are expecting better performance in the coming days with the reform of the economy and new projects that the government is trying to introduce like the partial cancellation of subsidizing of goods and services. So, we see a flow and the coming days will be much better than now.
How would you classify the asset management market and the companies in the market?
The asset management business in Egypt is not very familiar. In Egypt, any business usually starts as private firms. Previously people worked with brokers and it is only of late that they are gradually working with asset management companies. This branch is still in its early stages. It has a lot of potential to expand over the coming years, because it is very small, but it is growing rapidly, but it is still in its early stages.
What is the growth level?
We are focusing on medium class companies in Egypt specialized in asset management in medium cap companies. This is where we see the most growth in the coming 10 years.
The growth in assets in the company has a very high percentage. Since the last 3 to 4 years, some companies have grown by 50 % to 70% percent annually.
What would you identify as the main investment opportunities in Egypt?
Our field of business has been facing problems in making opportunities due to the crisis. Egypt has had some very bad luck since 2011, after the first revolution and right until the time we started to stabilize again about a year ago, until Sisi became the president. These 3 to 4 years have affected the economy badly. We had a growth rate of 7%. Last year we just managed a growth of 1%, this year we have seen a revival of things again. Egypt is a good area for investment in the whole region. We have started a new cycle of economic growth. For 4 years we have had a sluggish economy, no sign of growth, no FDIs, no new jobs, foreign reserves were going to negative levels and now we have started to build everything again and we are attracting more FDI and new investors. So, I think the development cycle of Egypt is underway. The coming years is ours.
Please describe your service, your clients and your customers in the Waha Portfolio Management.
Waha is a Management portfolio company in the Egyptian market. We are also expanding in the Gulf area. We are focusing on high network individual. We are focusing on medium class companies in Egypt specialized in asset management in medium cap companies. This is where we see the most growth in the coming 10 years. We specialize in managing portfolio for our clients to get them the best returns. We are also actively involved in the companies we are investing in. This means that we are involved in restructuring their organization, making capital investment for them, diversifying assets and adding assets. All this is done with the goal of increasing the returns of the clients investing with us. To summarize, we are working from both sides. From the clients’ side we are trying to maximize their returns by putting their money in the best company possible and from the company’s side we are helping them get better internal returns.
How do you differentiate yourself from other asset management companies? Why should the clients come to you and not go to your competitors?
Exactly because of what I said in my previous answer. Most of the asset management companies are only focusing on big companies and big names. But if you compare their performance over 10 years, not only in Egypt, but all over the world, you will see that the returns that you are making from a big company, you won’t be making the same returns that you would get that you would from investing in small companies that have to been selected in a wise and proper way. Most of our competitors do not even know the existence of this medium to small cap companies, because it is under their radar. This is our area. This is our blue ocean. This is an area into which nobody have ventured and we can fish there freely and find very good opportunities and good companies. We are turning these companies from medium, small companies to big companies to give it to these companies and then we get back again to find other smaller profitable companies.
You mentioned about your expansion plans in the Gulf regions. Can you elaborate on the regions?
We are currently working on establishing the IFC as a management company. Our aim is have a footprint in the Gulf area and in turn establish it in Dubai. We have already to take some steps in this way. We have established an investment company in Dubai already, but we need to expand it to have more portfolio management to allow us to meet clients and attract investment from them.
What are the main challenges when it comes to doing business in Egypt, apart from the politics and security?
To be frank, security is not a big challenge right now. Even politics. This is more media enticed news. You have been here for 2 to 3 weeks, and I doubt if you have seen any clashes on the streets like last year. Most of it was engineered anyway, but now things have started to stabilize again. In my opinion, the regulations need to be more flexible. People working on these rules and regulations need to be more flexible, more investment-oriented, more oriented towards implementing international standards. Egypt is full of opportunities, because of our population, our demography, our geography and so on. Our problem does not lie in hardware, but in the software. We have good people, good location, but the rules and regulations and the protocols etc. are not feasible.
What would be your vision for your company?
For my company, my vision would be to expand our business across the borders, north and south, east and west. We are trying to move faster. For my country, I would like to say that the coming days will be the days of Egypt. By days I mean 10 years or so (laughs).
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