Italian asset management company Azimut has agreed a deal to buyout one of Egypt’s biggest independent asset management firms, Rasmala Egypt.

Rasmala Egypt is a firm offering both conventional and shariah-compliant investment services. The firm had 8.46 billion Egyptian points ($474 million) worth of assets under management as of November 2018 – around 85 percent of which was invested in equity strategies, according to a press release issued on Tuesday announcing the deal.

The statement said that Rasmala has a team of 10 investment professionals based in Cairo that advises sovereign wealth funds, pension plans, banks and high net-worth individuals. The value of the deal was not disclosed.

Azimut cited several attractions of the Egyptian market for asset management firms in its statement, leading with its size (it is the biggest economy in North Africa with a population of 95 million) and demographics. It is also relatively immature in terms of investment vehicles, with only 1 percent of total gross domestic product (GDP) sitting in mutual funds, compared to 90 percent in fixed income or money market vehicles. Its financial market also plays a relatively small part of its economy (equity markets represent 25 percent of GDP in Egypt, compared to 30 percent in Turkey and 48 percent in Brazil), although a government initiative involving primary and secondary listings of shares in state-owned enterprises is currently under way.

In the statement, Giorgio Medda, head of Middle East, North Africa and Turkey at Azimut (DIFC) said: “The investment in Egypt confirms our commitment in expanding our MENA and Turkey regional footprint which will see Azimut as the first global asset manager with investment teams on the ground in Dubai, Cairo and Istanbul with an oversight on markets which we expect to attract significant interest from global investors.” 

He added that it also marked the firm’s first move into Africa, which he described as “a vast region offering unique untapped opportunities for product management and distribution expansion”. 

(Writing by Michael Fahy; Editing by Shane McGinley)

(michael.fahy@refinitiv.com)

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