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Citadel and Sphinx hold first close on distressed fund

The Egypt-focused fund, which is targeting $100m, has raised $51.5m from ‘a significant number of European institutional investors’.

Cairo-headquartered private equity firm Citadel Capital and Sphinx Private Equity Management, a subsidiary of Citadel, have held a first close on $51.5 million of the Sphinx Turnaround Fund.

Anchor investors in the fund include the European Investment Bank and the International Finance Corporation, the World Bank’s private investment wing, which are investing $17 million each. Citadel is sponsoring the fund with $10 million while Geneva-based Swiss Investment Fund for Emerging Markets is finalising a commitment of $7.5 million.

The fund is targeting $100 million and will make control investments of between $10 million and $15 million in distressed Egypt-based SMEs. It will also consider growth investments.

“With a fund that mainly targets distressed assets and turnaround situations we are providing timely access to finance and managerial expertise during one of the worst credit crunches in recent history,” Marianne Ghali, managing director of Sphinx, said in a statement.

Presently, the fund has identified investment opportunities in sectors including geo-textiles, automotive assembly, cosmetics, logistics, food processing, specialty glass and pharmaceuticals.

Ahmen Heikal and Hisham El-Khazindar, the co-founders of Citadel and the firm’s chairman and managing director respectively, sit on the fund’s investment committee.

Founded in 2004, Citadel is currently raising the Citadel Capital Joint Investment Fund, its first institutional fund targeting $500 million. Heikal told sister website Infrastructureinvestor.com this February that he expects a first close on the fund on the second quarter of 2009. The firm previously raised capital on an as-needed basis for deals.

Citadel is a majority shareholder in Sphinx, which currently manages $230 million in assets.