Man Capital – the investment arm of global conglomerate Mansour Group – is not a typical private equity investor. Hisham Halbouny, a managing director, tells Private Equity International where it sees pent-up demand.
What makes your strategy different?
It’s not a traditional or typical family office where you have the procurement of goods and services for the family. The way Man Capital is structured is broken down in a few pieces: one is managing the family trust, which does public equities and private equities [fund] allocations, then you have Man Capital investment arm, which is where I sit. The trust has a small allocation to funds, but the investment side – and this is where we’ve been growing the team – is basically looking to invest direct.
What is your motivation for going direct?
We’ve invested a lot on an investment team that is capable of going out there and sourcing deals and executing deals across borders. [With] your commitment to funds, you put the money in and then you have all your distributions, and keeping that allocation on a cliff is quite challenging. Looking at most of these funds and [their] investment horizon it’s quite short term from where we would like to see [our] investments. We prefer holding for longer periods and allowing those businesses to grow larger and expand more geographically. It’s not about leveraging the business seven, eight times EBITDA, cost-cutting and selling in a few years.
What is your strategy for creating value?
We focus on sectors where we see a significant amount of pent-up demand: under-served markets in the Middle East and Africa that are poised to benefit from mega-trends. You have a young, growing population, with a rising middle class [but] you have the exact opposite of that in Europe. We look at those businesses and we give them a completely different direction and enable them to actually grow in these territories, because these sectors are quite challenging for most private equity players. They don’t know how to operate in the territories we operate in.