Lebanese Private-Equity Firm Hunts Africa Diaspora for Deals

(Bloomberg) -- EuroMena Funds, a Beirut-based private-equity firm that has raised $350 million since 2006, plans to almost double assets as it seeks investments in Lebanese-owned companies operating abroad.

After a decade of deploying most of its capital in Lebanon, Jordan and Egypt, EuroMena’s latest fund has spent $55 million for stakes in a toilet-paper manufacturer in Nigeria, a Tunisia-based operator of clothing stores, and the Moroccan franchisee of French retailer Carrefour SA, said Giles de Clerck, the firm’s executive partner.

A debut debt fund primarily aimed at Africa, with a target of $200 million, is in the works, Managing Partner Romen Mathieu said. The firm also plans a $100 million private-equity fund that will invest a maximum $10 million per company in enterprises based in the Levant, a large area in the Eastern Mediterranean, that generate as much as $50 million in annual revenue, he said. Both funds are expected to close in 2018.

EuroMena is widening its geographical footprint to tap into a Lebanese diaspora that’s at least three times larger than the population living in Lebanon, while also backing smaller businesses in its home regions. The firm, which closed its third vehicle at $150 million last year, plans to mine this community for deals, and hitch a ride to the faster-growing economies in Africa, while mitigating some of the risk.

Due Diligence

“We would never invest with a Congolese family in Congo without having any ties with our base here in Lebanon,” Mathieu said in a phone interview from the firm’s home city. “You do 50 percent of your due diligence with three phone calls here in Beirut. You call the banker, the doctor and the lawyer, and by doing so you’ve done due diligence on the guy, his family, his grandfather, and the father of his grandfather.”

EuroMena is preparing to sell stakes in three companies from its first fund, all based in Egypt. The firm has held its positions in printing and packaging company Wataniya, software developer ITWORX Corp. and food producer Wadi Holdings SAE, through revolutions and currency devaluations, and now sees an opportunity to “make a decent return in dollars” by exiting the investments this year, Mathieu said.

The firm’s third fund will be 80 percent invested by the end of the year after it completes two planned acquisitions, de Clerck said, declining to provide details about the target companies.

To contact the reporter on this story: Mohammed Aly Sergie in Doha at msergie@bloomberg.net.

To contact the editors responsible for this story: Nayla Razzouk at nrazzouk2@bloomberg.net, Tom Lavell, Claudia Maedler, Vernon Wessels, Ross Larsen.