Please tell us a bit more about Actis Actis is a pan-emerging markets equity investor. We specialise exclusively in emerging markets and our focus areas are our core markets of Africa, Asia, and Latin America, with a head office in London. We've been investing in emerging markets for 65 years. Actis was established in 2004 after spinning out from CDC [Commonwealth Development Organisation], the UK's development finance arm. We mange $3.5bn in funds under our management, and we invest in private equity, energy and real estate. These are the three main businesses we focus on. Under private equity we focus on some specific sectors, which are the consumer, financial services, industrial, and healthcare sectors. What about your investment portfolio in Egypt? There isn't a budget; we are a pan-emerging markets investor, so we don't have a certain budget for investments in any country. We look for the best opportunities in our target sectors across all our markets. This is one of the benefits of being a pan- emerging markets investor; we are not restricted by budgets, as the opportunity has to make sense In Egypt since we stated operations in 2001. We've invested over $500m in Egypt, spread across a number of investments. We started doing our first management buy-in in the country acquiring El Rashidi El Mizan from Unilever, which we exited in 2007. Then we acquired the Sidi Krir Generating Company, which was one of the three Build, Operate,Transfer [BOT] power plants, and exited in 2007. Then we invested in Sinai Marble and Granite, and then in Monheim Group for Food Industries, which we exited in 2010. Then Commercial International Bank (CIB), and currently we are the largest shareholders in the bank. Then we created a big payment processing platform called Emerging Markets Payments Holdings (EMPH), which started up with the acquisitions of Mediterranean Smart Cards Company (MSCC), which will be a multi-country financial service and payment processing business. What about your current portfolio? Today the investments we still have on our books are the investments in CIB of $244m total investments, EMPH, and Sinai Marble. Do you have any upcoming projects? Regarding upcoming project our strategy will still be the same, so we will continue to focus on the above sectors. We continue to open more businesses in Egypt despite the very difficult conditions, but this needs to be reflected in high quality opportunities. So we continue to be definite, focusing on the consumer sector and the financial services sector, and the health sector in Egypt. Why these sectors in particular? They are defensive sectors by which we attempt to hold the ground during difficult conditions. They are naturally positioned to do well, especially with rise of the middle class in Egypt, and they are in position to do well in countries with high populations like in Egypt. They have continued to do well despite the difficult conditions in the last two years. The exchange rate is a problem across the board, but I do think that market leaders are well managed and continuing to do well despite the difficult conditions. That being said, the exchange rate is a problem, and doesn't just affect these sectors but will affect all sectors. It is one of the biggest problems in foreign investors' mindsets. We have a slogan, “The positive power of capital", we care about our impact on the communities we invest in and not only the profit gain. So we make sure that our investments touch the life of communities that we invest in a positive way. What about the exchange rate issue? This creates a negative overhang for investor appetites. It gives bad signals, but mainly for investors who make generalised investments. Someone like Actis, for example, we are focusing on very specific assets, picking on the back of specific sector themes and on the back of quality, well-managed assets that have continued to trade well since the revolution. I think you can still find attractive investment opportunities for investors in the medium to long term. Evaluate the market, especially after the unrest and turmoil? The unrest and turmoil are bad, and it gives a negative impression. And it is a very unwelcome development, but we have to spirit between that and underline the performance of specific companies that have a defensive market positions and strong management teams, and that have continued to grow well despite the difficult conditions. Can the market get over these problems soon? I don't know. But it has to be as quickly as possible as the economy is severely strained because of what happening is on the reserves front, the foreign exchange front, the lack of foreign direct investments, and on the inflation front. All these problems should be addressed as soon as possible. In my point of view, however, Egypt is ‘too big to fail'. One of the main things is the political inclusivity, which will result in a much calmer environment that will then trickle down into the economy, but there are curtain steps that have to be taken for this. One of the main problems is transparency. The budget deficit, the energy issue and the tax issue, will all negatively impact FDI [Foreign Direct Investment] in Egypt, as the biggest enemy to any investor is uncertainty and low feasibility. One of the main things the government has to do is to be more transparent and to speak with the target audience with more clarity. They have to come out and have very clear messages on what is going to happen with taxes and the foreign exchange market. So, there is a lack of credibility and feasibility, and a lack of certainty, and these need to be tackled very quickly. All these problems are linked: the budget deficit and energy are very much linked, for example. And the government has no coefficient inflow to cover their expenditure because they have had very low FDI coming into the country. That is also because of the low revenues and the increased of expenditure which will lead the budget deficit to cross 11% to 12%, which is very big number. People are not clear what is going to happen on the tax front: Will there be tax on capital gains or not? Will there be any taxes on IPOs [Initial Public Offering] or not? Is the income tax going to be up or not? Add to that the continuing hunt for money from businessmen, who used to have big investments in Egypt, thus creating very negative massage for foreign investments in the country. The only thing I want to say about the constitution is that it would have been better if it was more representative for a broader base of Egyptians. What do you think about the recent acquisition deals in the Egyptian market? EFG Hermes [and QInvest] hasn't not gone through yet. I don't know if they are willing to go through and whether that's directly linked with the lack of feasibility of the regulatory environment. It has been in the news for a while and it has not happened, and I don't know if it will or not. We will wait and see. For NSGB [National Société Générale Bank] it was more motivated by Société Générale France, which needs to exit NSGB due to other priorities rather than a specific view on Egypt, and I think because they want to get it done quickly, from the market view some people may think the price wasn't right. Orascom Telecom and OCI (Orascom Construction Industries) are high profile cases. We don't know how these are going to end up. Obviously it's going to impact the EGX significantly because of Orascom's volume on the EGX, but I think that step has been taken because of legitimate worries about the investment environment in Egypt today. Do these issues worry you? The lack of feasibility and transparency definitely worry me. Are we going to see specific foreign investments from cretin countries? Investors, regardless of their country, are still making investments as they see good opportunities to gain more profits. In terms of foreign private sector investment into Egypt today, they wouldn't be doing this unless they saw a good reason for it. If we can deal with the lack of feasibility and transparency, political cohesion, and the foreign exchange rate, I think we will be surprised about the numbers of investors numbers who will invest in Egypt. Basically, Egypt is a fundamentally attractive market that is passing through a very difficult stage these days. Evaluate Egypt among other emerging markets? It is one of Actis's target markets, but like I said is going through a difficult time. We need to see many improvements here. Are you considering more involvement in infrastructure projects? Yes, absolutely. Our energy team is open for looking for more investments in Egypt today but, again, this particular sector needs more clarity; this goes for the renewable energy sector as well as electricity. What about your investments in Africa? Africa is our largest market with total investments of $1.5bn. We have been ranked as the best private equity fund manager in Africa because of our dedication to the region. There are other promising markets in Africa such as South Africa, Nigeria, and Kenya; while in North Africa there is also Tunisia and Morocco.