Arab Finance: Between 2019 and 2020, the size of completed merger and acquisition (M&A) deals in the Middle East increased. In 2020, $114.7 billion worth of M&A transactions were concluded in the Middle East, a 126% increase over 2019, as reported by the Information and Decision Support Center (IDSC). Investment banking has supported the sustainability and progress of the Egyptian economy.

That is why Arab Finance has interviewed Wael Ziada, CEO of Zilla Capital who has shared with us the success story of Zilla Capital and talked about the challenges facing investment banking in Egypt.

1-Zilla Capital is an investment bank that was founded in 2018. How would you describe its journey from 2018 until now?

When we started Zilla Capital, we had a vision of focusing on the M&A segment, and today we are the largest M&A investment bank in Egypt. With a wide range of services, including financial advising, asset management, private equity, and non-banking financing options, we were able to serve as a one-stop shop for all financing and investment requirements. Over the past years, the investment banking division has posted a record of successful closures in several sectors across the region, such as hospitality, education, healthcare, retail, food manufacturing, fintech, and real estate.

2-What are the financial and non-financial services that Zilla Capital offers?

Zilla Capital's services are summarized in the following:

Investment Banking: The Company’s advisory services utilize the extensive expertise of its executive team and deep knowledge of the MENA region to provide our clients with world-class transaction advisory, all-encompassing management consultancy, and operational expertise.

Asset Management: Zilla Asset Management comprises the group’s conventional asset management and private investment in public equity (PIPES) activities. We provide investors with a broader investment universe across the MENA and GCC regions.

Private Equity: Zilla Capital’s private equity arm focuses on and targets high-potential opportunities that demand operational and technical expertise and have high barriers to entry. We seek companies with turnaround potential and pursue an active role in unlocking dormant shareholder value by restructuring management, streamlining operations, and providing financial engineering.

Non-banking financial services: Zilla Capital provides leasing and factoring services through its financing arm, assisting companies by providing clients with a means of acquiring many types of assets, besides providing them with short-term financing to alleviate working capital pressures.

3-What is the service that has the highest percentage of your deals? And what is the size of the investment in this service?

Most of our deals are in investment banking services. Unfortunately, the size of the investment is confidential and not disclosed.

4-Zilla Capital was one of the first firms to do activist investment funding. How is this different from other forms of investment?

Activism is about taking a view on a specific investment opportunity that matches a specific set of preset criteria, which mostly has to do with allowing Zilla to influence the business of the target investment. It starts by identifying the target, building a significant investment in the target through a block-fetching process, and then starting to influence the company positively in all manners from governance to operation. It's a demanding type of investment, but the payoff is well worth the effort.

5-The firm started with an estimated fund of EGP 50 million. What is the size of the company’s investments now?

While we are almost 10x of what we started, we still believe that we can handle more; however, due to the market conditions in Egypt, we have not been able to grow at our desired pace.

6-Why would clients pick Zilla Capital over different investment banks? What makes Zilla Capital unique?

Given our focused approach, we are very close and attached to our clients, and the reach of our executives makes it easy to take it. We help connect investors with unique investment opportunities and companies with smart capital. Moreover, we take all of this and serve in several locations: Cairo, Dubai, Abu Dhabi, Riyadh, and Nairobi. We measure our performance based on the long-term success of our clients and partners.

7-What are the criteria that Zilla Capital has to accept deals and projects? For example, what is the minimum amount of capital that you can fund?

$100 million is our sweet spot; however, that is not a black-and-white answer; we can sometimes go below that depending on the case.

8-Zilla Capital operates in five locations. Demographically, what is the area that includes the most investment projects? And do you consider expanding to more countries?

We operate in Cairo, Abu Dhabi, Dubai, Kenya, and Saudi Arabia. Egypt is where most of the investment projects are.

9-From your point of view, what is the most successful and sustainable project Zilla Capital has been involved in till now?

Nothing specific; however, we have assisted a few of our clients in raising capital that was partially deployed in sustainable initiatives.

10-How would you evaluate Egypt's investment financing market? What difficulties does the industry face? And could the market possibly accommodate more firms that provide investment funding?

For starters, I believe currency stability is key. It is quite difficult to close deals in an environment where you have two prices for the currency. I would also recommend to the government that it find ways to fast-track some of the mandatory bureaucratic requirements that could be, in some cases, very time-consuming. Egypt is full of opportunities, but as you know, it takes two to tango.