Egypt’s EFG-Hermes Buys Nigerian Brokerage in Frontier Markets Push


By Matthew Martin

Acquisition adds to EFG’s operations across nine countries

Investment bank started Kenyan operation in July last year

EFG-Hermes Holding SAE bought Nigerian brokerage and research house Primera Africa Securities Ltd. as the investment bank seeks to expand in frontier markets across Africa and Asia.

The acquisition marks Cairo-based EFG Hermes’s second foray into sub-Saharan Africa after receiving a Kenyan stockbroking license in July 2017, extending its reach to 12 countries including Kuwait, Saudi Arabia and Oman.

The firm plans to use the Lagos-based operation as a hub to expand into West Africa, Ali Khalpey, chief executive officer of EFG-Hermes’ frontier unit, said by phone from London. The company intends to boost its investment-banking business across the continent, where it continues to see “very strong inflows” and is already advising on several acquisition mandates, he said.

EFG-Hermes wants to turn Primera into one of the top three brokerages in Nigeria, he said, adding that currently, Primera isn’t even among the biggest 10 brokers. Khalpey declined to provide the value of the acquisition. All the employees at Primera will remain with the company, which will be rebranded EFG-Hermes.

“Upon completion of the acquisition, we will look to expand the company’s research and investment-banking platforms further,” he said. “We see significant investment banking advisory opportunities in Nigeria and our local presence will allow us to better serve the corporate sectors.”

Click here to read more about frontier markets as an investment category

EFG-Hermes, the No. 1 bank for advising on initial public offerings in the Middle East and North Africa last year, hired Khalpey in January 2017 to build a frontier-markets business. Since then it has also opened in Bangladesh, acquired a brokerage in Pakistan and is starting to serve clients in Vietnam. It recently got approval from the Financial Conduct Authority to operate in the U.K.

“We’ve managed to grow substantially in frontier markets in a very short space of time,” Khalpey said. “We’re already doing a lot of work in Vietnam and will be looking at Latin America over the longer term.”

(Updates with details on number of countries in second paragraph, Nigerian plans in fifth.

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