Amid the Rapid Economic Shifts in the Egyptian Market: Investment Funds Emerge as a Key Financial Instrument
Amid the rapid economic transformations in the Egyptian market, the diversification of funding alternatives has become one of the most crucial factors supporting the stability and attractiveness of the investment environment. Investment funds, in their various forms, are at the forefront of these alternatives. They are among the most effective mechanisms for risk management and maximizing investment returns due to their pivotal role in pooling individual savings and directing them toward diversified investments — whether in equities, fixed-income instruments, real estate assets, or precious metals.
Nour El-Din Mohamed, CEO of Target Investment, stated that the primary value of investment funds lies in their ability to strike a balance between return and risk. This makes them an ideal choice in the current challenging landscape, where investors prefer to avoid individual speculation in favor of more stable and diversified tools. He pointed to the continuous expansion of fund types available in the Egyptian market, ranging from equity and debt funds to balanced, index, real estate, and precious metals funds.
In an interview with Amwal Al Ghad, he revealed that the company plans to launch three new funds this year — one focused on Sharia-compliant equity investments, another targeting fixed-income instruments in foreign currencies, and a third (currently pending regulatory approval) specialized in fixed-income instruments in local currency. These initiatives align with the company’s strategy to increase its assets under management to over EGP 2 billion by year-end. He also disclosed plans to raise the holding company’s capital to EGP 50 million by the end of 2025 as part of its roadmap to become a full-fledged investment bank by 2026.
Nour El-Din anticipates a positive performance for investment funds this year, in line with the Central Bank of Egypt’s shift toward a monetary easing policy and interest rate cuts. However, this performance is also contingent on the stability of geopolitical conditions in the region, which could otherwise hinder the funds’ ability to fulfill their investment role. He emphasized the importance of continuously working to create a more attractive investment climate that aligns with economic shifts and is capable of attracting more foreign direct and indirect capital.
Considering the flexibility of investment funds, what are the expected performance scenarios for the second half of the year?
The performance of investment funds depends on several key factors, most notably interest rates — especially for fixed-income funds. A decline in interest rates typically drives investors toward equities, real estate, and precious metals at the expense of debt instruments. The performance of the Egyptian stock market also plays a crucial role, directly impacting equity and index funds, particularly during periods of low liquidity or declining confidence. Inflation rates also affect the valuation of fund assets, especially when returns fail to keep pace. Additionally, exchange rate fluctuations directly influence funds with holdings in import/export-dependent companies and impact foreign investor appetite.
Given all these combined factors, the outlook suggests varied positive performance among fund types. Equity funds may experience growth supported by the positive stock market trends, while fixed-income funds may see reduced returns due to falling interest rates. Meanwhile, precious metals funds may show volatile performance due to ongoing economic and geopolitical tensions.
From your perspective, what are the key requirements to boost the investment fund industry and amplify its role?
There is a pressing need to expand the range of available funds in the Egyptian market to meet evolving economic conditions and investor demands. Recently, there has been an expansion in fund types — from equity and debt funds to balanced, index, real estate, and metals funds. This diversity increases opportunities across all investor segments, allowing individuals and institutions to select products aligned with their goals and risk tolerance.
Looking ahead, a notable increase is expected in both the number and variety of funds, especially with the existence of flexible and encouraging regulations — such as those permitting the launch of real estate, gold, and Sharia-compliant funds. This will enhance market activity and offer more options to investors. Simultaneously, raising awareness among both retail and institutional investors about the role and benefits of investment funds is essential, as increased trust and participation will positively reflect on fund performance.
To what extent do regional geopolitical and economic tensions affect foreign investment inflows?
Geopolitical tensions in the region are external factors, and while their easing would benefit the local economy, it is essential for authorities to work on creating a more attractive investment climate to draw in foreign capital and accelerate investment flows. The state has already begun taking practical steps in this direction, with the Central Bank adopting a monetary easing policy to reduce financing costs for businesses and support their growth, thereby highlighting promising investment opportunities across various sectors.
In general, external challenges — both political and economic — are beyond direct control. However, the state must eliminate domestic obstacles that raise investor concerns, foremost among them being the availability of foreign currency. Incentives should be provided to attract hard currency from diverse sources, avoiding reliance on a single source. Ensuring safe entry and exit for investments is also crucial, especially as multiple sectors — including consumer goods, pharmaceuticals, manufacturing, education, banking, technology, financial services, tourism, and real estate — offer growing opportunities in the Egyptian market.
What is the role of the Egyptian Exchange (EGX) in attracting foreign indirect investments?
The Egyptian Exchange still requires several measures to deepen its liquidity and make it more attractive to international institutions. Despite being one of the most important funding alternatives for the local economy, it has not yet reached its full potential. Raising public awareness about the Exchange’s role as a vital financing tool — enabling both companies to expand and individuals to earn strong returns — is essential, especially as a hedge against inflation.
While the EGX offers attractive stock prices for investors, the lack of awareness prevents broader participation in the capital market. Regulators are working on enhancing the Exchange’s infrastructure and upgrading trading systems, but this must be accompanied by investor education to yield tangible results.
Moreover, the state must take serious steps toward executing the public offering program, which is vital for injecting liquidity into the market. These offerings should be launched at attractive fair prices and must be supported by effective promotion to draw in new capital and investors.
What are Target’s main strategic priorities in the Egyptian market for this year?
Target Asset Management was established in 2006 to specialize in managing financial portfolios and investment funds — including equity portfolios, fixed-income portfolios, Sharia-compliant portfolios, and capital protection portfolios. Target Holding was later founded with the aim of becoming a full-fledged investment bank. It began operations in June 2015 through Target for Portfolio Management. This year, the goal is to raise the holding company’s capital to EGP 50 million to complete the licensing process necessary for transitioning into an investment bank, with a plan to increase the capital to EGP 100 million by 2026 and obtain an electronic payments license next year.
Are there plans to launch new investment funds this year?
The company’s strategy this year focuses on investment and asset management — including launching new funds and managing diversified portfolios for individuals and institutions. The company plans to launch three new investment funds this year and to attract more portfolio mandates and private fund management opportunities.
Currently, preparations are underway to launch Target’s first fund specializing in fixed-income instruments in local currency. Regulatory approval from the Financial Regulatory Authority is pending to open the subscription window. The fund’s initial capital is set at EGP 150 million in the first phase, with a document price of EGP 10 and a minimum investment of 10 documents. The second phase targets EGP 250 million, focusing on institutional clients, corporations, and high-net-worth individuals.
We are also studying available investment opportunities in several sectors — including pharmaceuticals, food, and energy — in preparation for launching a direct investment fund by 2026.
What is the size of assets under management and the growth target by the end of 2025?
As of the end of Q1 2025, total assets under management stood at approximately EGP 1 billion. The goal is to reach EGP 2 billion by the end of 2025 through acquiring more portfolios and managing private funds, as part of the company’s strategy to expand its asset base under management.