EFG Hermes UAE Limited, a wholly owned subsidiary of  EFG Hermes Holding SAE, has entered into definitive agreements to invest $21.5 million in Frontier Investment Management Partners Ltd (FIM), an asset management firm.  

Following the investment, EFG Hermes will own 50 per cent stake in FIM.  The remaining 50 per cent of FIM will continue to be held by its founder and chief executive officer Hedi Ben Mlouka.

Established in 2008, FIM has grown over the past few years to become one of the region’s leading managers with $1.6 billion of assets under management (AUMs) and a management team with a stellar track record of investing client money.

In order to achieve the targeted synergies from this investment, EFG Hermes will seek the consent of its clients to contribute its regional (non-Egypt related) portfolios and funds into FIM during the coming six months, said a statement.  

EFG Hermes Group CEO Karim Awad said: “Our investment in FIM is integral to our announced strategy of growing our asset management business through adding vital expertise, scale, and a more diversified product base that fits well within our frontier markets expansion strategy.  As Mena and frontier markets grow, we believe that institutional investors will continue to seek specialized active fund managers with a strong on the ground knowledge of these markets.  Through our investment in FIM, EFG Hermes has positioned itself as the manager of choice for those allocations.”

The independence of the FIM management team will be maintained with Ben Mlouka retaining his positon as chairman and CEO. FIM will continue executing its current strategy of delivering unique returns to its institutional investor base.

The shareholders have agreed to discuss the implementation of long-term incentive plans to ensure long-term alignment of interest and retention of key employees.  FIM will join Egyptian Portfolio Management Group (EPMG), Hermes Fund Management (HFM), Vortex and Rx Healthcare as members of the EFG Hermes Asset Management businesses, while retaining its independence, brand name and autonomy in investing across regional and frontier capital markets.

EFG Hermes will provide FIM with all the support (including seed- capital) it needs to execute on its business plan.

The transaction has already been approved by the Dubai Financial Supervisory Authority.  Following the completion of this transaction, EFG Hermes will have $4.5 billion of public and private market AUMs. – TradeArabia News Service