Citadel sees growth despite Egyptian revolution

The Cairo-based firm raised a combined $767.9m in third party cash for platform companies and at the firm level in 2011.

Even though it operates in one of the most politically tumultuous regions in the world, Citadel Capital oversaw growth at its platform companies and at the firm level last year. 

The Cairo-headquartered firm increased its assets under management to $4.3 billion in 2011, up 6.3 percent from the previous year, the firm announced in a statement. Assets under control (committed equity and committed debt) also increased in 2011; the firm added $761.1 million for new investments. 

Platform companies grew as well, benefitting from $497.7 million in third party cash raised over the course of 2011.

Citadel raised an additional $270 million in third-party cash at the firm level, which included $150 million from a new debt facility guaranteed by the US Overseas Private Investment Corporation. A drawdown on the OPIC funds took place in the first quarter of this year, according to the statement.

Citadel also benefitted from the completion of a rights issue in October, which netted the firm $120 million in cash, according to the statement. At the time, managing director and co-founder Hisham El-Khazindar estimated Citadel’s war chest now stood at about $200 million in deployable capital.

Although Citadel managed to attract a substantial amount of third-party cash last year, the firm was unable to post an exit in 2011. The firm had net standalone losses totaling $18.3 million, compared to a $49.7 million loss the previous year. The firm attributed the smaller losses to an 11.7 percent reduction in operating expenses. 

Citadel reported a consolidated net loss of $133.3 million on the year, which was due to a non-cash write down of upstream oil and gas investment NPC, expenses related to the “clean-up” of investments at the portfolio company level and foreign exchange losses related to investments in Sudan. The firm did not exit any of its investments last year.

Third party analyst RisCura assessed the firm’s year-end portfolio net asset valuation at $861.1 million. This was the first time Citadel used the firm as a third-party valuation provider, a spokesman told Private Equity International. RisCura used a different valuation methodology than what was employed at the end of the 2010 fiscal year, when the firm reported a PNAV of $857.8 million, according to a release from June 2011. 

In the release, Citadel highlighted its growth despite political turmoil in Egypt. Egyptian President Hosni Mubarak was forced to resign last February amid a revolution that highlighted his abuses of power. Mubarak was placed on trial for ordering the murder of protestors during the revolution, among other crimes. A verdict is expected in June. 

Citadel was founded by El-Khazindar and Ahmed Heikal in 2004. In addition to its Cairo offices, the firm also maintains an office in Algeria.