Incorporated in 2015, Lorax Capital Partners (“LCP”) is an Egypt-focused private equity firm. Over the course of the last 5 years, LCP has supported the Egyptian American Enterprise Fund’s (“EAEF”) in deploying c. $175m across 5 companies. One of their most notable investments was Fawry, the country’s largest e-payment network in Egypt, making its debut listing on the Cairo Stock Exchange in August 2019. The company was also the first unicorn in Egypt and one of the first in Africa. Being a growth capital investor, LCP’s specificity notably is a strong focus on technology, which the team integrates as a core component in its investment case.
LCP Fund II constitutes its first multi-investors fundraising. Proparco’s $11 million investment contributes to LCP Fund II’s first closing of $142 million alongside EBRD, EIB, IFC, and EAEF.
With a target size of $250m, the new fund plans to support profitable and growing midcap companies in promising sectors of the Egyptian economy, favoring local consumption and production as well as financial inclusion. The fund will also target companies eager to expand regionally. The manager will aim to implement best governance and environmental and social practices in the portfolio companies, while helping them to increase their value creation.
A catalytic role for the Egyptian private equity market
Proparco’s investment will support economic development and job creation in Egypt, thus contributing to SDG 8 “Decent Work and Economic Growth”.
By participating in the first closing of the fund, Proparco is also supporting the development of private equity in Egypt and the region. This operation will thus contribute to reducing the long-term financing gap SMEs and mid-cap companies face in Egypt, all the more important in a period of economic downturn caused by the COVID crisis.