March 2011
March 1
President Barack Obama and the U.S. Department of State champion an initiative to establish EAEF
Protestors on top of Berlin Wall History of Enterprise Funds
1990s: First Wave of Enterprise Funds
In the wake of the Berlin Wall’s fall in November 1989 and the collapse of the Soviet Union in December 1991, 29 countries in the former Eastern bloc began transitioning from centrally-planned to market-based economies. Recognizing the need to strengthen these nations’ financial sectors to support this pivotal transformation, the George H.W. Bush administration took decisive action. Congress authorized nearly $1.2 billion to establish 10 U.S.-backed investment funds, collectively known as the “Enterprise Funds,” across 19 countries in Central and Eastern Europe and the Former Soviet Union.
For each enterprise fund, an independent board of directors with private sector experience is appointed to guide strategy and provide supervisory oversight. After decades of operations across Europe and Eurasia that included some slow starts and organizational hurdles, these Enterprise Funds proved successful in achieving their economic goals while delivering significant financial returns. While performance varied across individual funds, the enterprise funds collectively demonstrated the effectiveness of driving market-driven growth and generating value through private sector-led development.
2011: Second Wave of Enterprise Funds
In 2011, the Arab Spring uprisings led to renewed interest in the use of enterprise funds in countries in the Middle East undergoing political transitions.
In May 2011, Congress announced plans to create an enterprise fund aimed at promoting Egypt’s private sector, with a focus on unlocking investment in small and medium-sized enterprises (SMEs). The U.S. government, leveraging its historical commitment to free-market principles, launched the Egyptian-American Enterprise Fund (EAEF) in 2013. Modeled after the early enterprise funds of the 1990s, the U.S. Congress appropriated $300 million for EAEF, which operates as a private corporation focused on driving private sector-led growth and attracting foreign investment to Egypt.
THE IMPACT OF EARLY ENTERPRISE FUNDS
The United States’ efforts to promote a stronger business climate in Egypt are best achieved in cooperation with strong partners. Just as prior Enterprise Funds successfully created parallel private investment funds to co-invest in investment opportunities, the Egyptian-American Enterprise Fund will create similar funds to attract sovereign and private investment. Sovereign governments and impact funds can play a critical role in facilitating co-investment by offering to match U.S. government funds and making introductions to local private investment pools that may also be interested in co-investment opportunities.
Enterprise Funds are one of a few development programs to achieve sustainable, economic developmental impact while leveraging limited investment resources to generate significant program income to endow long-term, host country Legacy Foundations, and ultimately return a significant portion of their original grant funds to the U.S. Treasury.
The following statistics represent some of the development impact of the enterprise funds from the early 1990s:
$1.2 billion of U.S. government funding has been invested in developing funds in 19 countries.
$1.7 billion of net proceeds realized from successful investments have been reinvested by the Funds, allowing them to leverage the use of their initial funding.
$6.9 billion of private capital was raised from outside the U.S. government based on the convincing value proposition of the Funds.
A total of $9.8 billion in capital has been raised from all sources over the lifetime of the Funds.
Significant developmental capital has been provided to SMEs and entrepreneurs operating in early-stage transition countries where private investment capital was limited or non-existent. This contribution has helped create environments in which the culture of private enterprise could flourish.
EAEF MILESTONES
In 2011, the U.S. Congress authorized the creation of the Egyptian-American Enterprise Fund as a private corporation with up to $300 million to promote the development of Egypt’s private sector. Over the last several years, the Fund has stayed on track to fulfill its mission by supporting seven, first-time fund managers that have helped EAEF invest in over 130 companies, with plans to support additional Egyptian-led funds and companies in the near future.
For a more detailed look at EAEF’s milestones, please refer to the timeline found in our 10 Year Impact Report here.
May 2012
May 1
James Harmon is appointed Chairman of EAEF
July 2015
July 1
EAEF selects LCP as its primary investment advisor
September 2015
September 1
EAEF leads a consortium of international investors to finance the $100 million acquisition of Fawry, the largest electronic payments service company in Egypt
November 2015
November 1
EAEF acquires a majority stake in Sarwa Capital, today known as Contact Financial, the largest non-banking, consumer finance company in Egypt
June 2016
June 1
EAEF invests $1.2 million in Smart Medical Services, a healthcare-tech startup
December 2016
December 1
EAEF invests $10 million in Egypt’s largest VC firm, Algebra Ventures, a fund supporting the launch of Egyptian tech start-ups
October 2017
October 1
EAEF invests EGP 10 million ($0.6 million) alongside Egypt Ventures and the International Finance Corporation in regional start-up accelerator Flat6Labs’ new EGP 100 million Cairo Fund, which will directly support 100 early-stage start-ups over five years
November 2018
November 1
EAEF invests $3 million in woman-led healthcare start-up Dawi Clinics, a chain of clinics providing comprehensive medical services
February 2019
February 1
EAEF invests in Misr Hytech Seed International, the leading producer of proprietary corn seeds in Egypt, as part of a consortium that includes Helios Investment Partners, a leading pan-African PE firm
March 2019
March 1
EAEF invests in Nermien Ismail Schools Group, a leading K-12 private school developer and operator in Egypt
August 2019
August 1
EAEF becomes signatory to the International Finance Corporation (IFC) -led Operating Principles for Impact Management, a new market standard for impact investing
May 2020
May 1
EAEF invests in Hassan Allam Utilities, an investment platform for power, renewables, and water-related opportunities in Egypt
July 2020
July 1
EAEF invests in Abu Auf, Egypt’s largest specialty retailer
September 2020
September 1
EAEF co-invests in Al-Tayseer Healthcare Group, the largest healthcare provider in the Nile Delta region
October 2023
October 1
EAEF commits to supporting EastLane Partners, a buyout and growth-focused investment fund
December 2023
December 1
EAEF commits $5 million to the first-time venture capital fund of Foundation Ventures