In 2018, Egypt announced the establishment of the Sovereign Fund of Egypt (TSFE) under Law No. 177 of 2018. Generally, a sovereign wealth fund (SWF) is an investment fund owned by the state and established from income generated by the government including the state-owned assets, balance of payments surplus, privatization proceeds, fiscal surpluses, and other government receipts.

In this Factsheet, Arab Finance will introduce all that you need to know about TSFE and its role in the currently operating initial public offering (IPO) program.

• Independently managed by Egyptian business and financial cadres, TSFE targets establishing companies or increasing their capital, investing in securities and debt instruments, and borrowing through issuing various debt instruments.
• Among the top 100 largest SWFs, TSFE ranks 47^th in terms of asset size with total assets of around $12 billion. TSFE also ranks 12^th among the Middle East region and 4^th among African countries.
• TSFE’s portfolio includes many assets owned or managed by the fund such as the Tahrir Complex in Downtown, Ex-National Democratic Party Land, the Ministry of Interior’s former headquarters, Cosmic Village and Discovery Village in 6^th of October City, Nasser Institute Extension, Former Andalous Park in Tanta, and the Bab al-Azab area of Salah al-Din Citadel.
• TSFE initiated some projects to capitalize on its assets to generate revenues in both local and foreign currencies. The investment portfolio of the fund includes projects for water desalination and treatment plants, power stations, e-commerce logistical chains, and projects for stores of food commodities, in addition to other investments in food and agricultural industries, and medical and education sectors.
• The Egyptian fund has launched four affiliate sub-funds to manage investment opportunities in various fields including tourism, real estate and antiquities, infrastructure and utilities, healthcare and pharma, and financial services and fintech.
• Established in September 2022, the pre-IPO sub-fund sells public properties to increase the private investment share in the Egyptian economy, through preparing state-owned companies for listing. Hence, several public enterprises and assets were acquired by the sub-fund.
• The pre-IPO sub-fund resources are composed of the fund's authorized capital, investment returns on the fund’s assets, fees accrued to the fund, loans, and facilities obtained by the fund, in addition to other resources approved by the fund’s board.
• The authorized capital of the pre-IPO sub-fund is equivalent to EGP 10 billion, according to the establishment decree.
• Under the IMF's loan agreement, Egypt is committed to bridging the $17 billion financing gap by securing loans from international financial institutions and selling stakes in state-owned assets and enterprises. Selling these assets takes place through TSFE pre-IPO sub-fund.
• The Minister of Planning and Economic Development announced, in October 2022, that the pre-IPO sub-fund is preparing state-owned companies to be issued for a public offering with values of $5.5-6 billion.

By: Amina Hussein

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