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Citadel Capital gears up for outperformance: Hisham El-Khazindar, managing director and co-founder of Cairo-based private equity group Citadel Capital, talks to Acquisitions Monthly about emerging opportunities in the North African region.

Article Excerpt
Hisham El-Khazindar: There are clearly some good deals out there, but our focus for most of 2008, and this will continue for most of this year, primarily on our existing investments.

It's very easy to get distracted by all these increasing opportunities, and I think it's important to maintain a certain discipline and a continued focus on existing investments a little longer, to make sure they continue to do well even in the face of challenging conditions.

Acquisitions Monthly: How has the credit crunch impacted on deals in MENA?

Hisham El-Khazindar: It is having an impact but the dynamics in MENA are different. Leverage was never the main driver of returns, as it was for buyout deals in the US and Europe.

Even when the world had lots of liquidity, the sophistication of the banking systems in our region meant you could not get the kind of leverage that private equity got in the West.

A typical example was the UK, where deals were often done on a debt to Ebitda multiple of six to nine times. Our transactions were done on debt to Ebitda of four times, maximum. We've been a lot less reliant on debt for our transactions and less reliant on financial engineering and leverage for our returns.

We've driven our returns by focusing on the right industries and developing regional leaders through consolidation and acquisitions.

There's no doubt...

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