Sagard Ventures into UAE, Egypt, Turkey, and Saudi Arabia for Investment Opportunities

20 Sep, 2023

Sagard Ventures into UAE, Egypt, Turkey, and Saudi Arabia for Investment Opportunities

Sagard, a prominent Canadian alternative asset management firm overseeing assets worth $14.5 billion, has set its sights on investment opportunities in the UAE, Egypt, Saudi Arabia, and Turkey, according to its Chairman and CEO.

The company, backed by Abu Dhabi's ADQ holding company, recently established an office at the Abu Dhabi Global Market as part of its expansion into the region. Sagard's initial focus in these markets revolves around financial services, with a particular emphasis on FinTech opportunities. Paul Desmarais III, the CEO, views the UAE as a regional hub, expressing interest in Egypt, Turkey, and Saudi Arabia as attractive markets for FinTech ventures. He acknowledges the potential of these markets in light of the increased adoption of online banking and contactless payment methods, driven by the COVID-19 pandemic.

The FinTech sector is on an upward trajectory, expected to double in size to approximately $270 billion by 2027, up from over $135 billion in 2021 across the Middle East, Africa, and South Asia, as per the DIFC FinTech Hive 2022 report. The revenue of the FinTech industry in the Middle East, North Africa, and Pakistan is projected to surge to between $3.5 billion and $4.5 billion by 2025, compared to $1.5 billion in 2022, fueled by robust economic growth and a strong banking sector.

Sagard plans to collaborate with existing financial institutions and FinTech firms that aim to extend financial services to traditionally underbanked or unbanked populations. They bring valuable experience from their ventures in Canada, where they've played a role in establishing leading financial technology brands such as Wealthsimple.

Sagard boasts a diverse portfolio of 125 companies, including Wealthsimple, an online trading platform, and Dialogue, a health and wellness platform. Established in 2002 through the initiative of Power Corporation of Canada, it has grown with support from institutional investors, including Canada's pension plans, family offices, financial institutions, and corporations dedicated to nurturing talented entrepreneurs.

Over the years, Sagard has experienced substantial growth, with assets increasing from $400 million in 2016 to $15 billion today. The firm maintains ambitious plans for the future, aiming to become a leader in various sectors over the next five to ten years. Their objective is to generate robust financial returns while doubling their assets under management (AUM) to $30 billion within the next five years.

In July, ADQ, in collaboration with the Bank of Montreal (BMO), acquired minority equity stakes in Sagard, facilitating its growth, including expansion through mergers and acquisitions. Sagard has also expanded its partnership with Great-West Lifeco (GWL), an international financial services holding company, which is increasing its existing minority share in the company.

ADQ recognizes Sagard's expertise in various sectors, particularly in financial services, healthcare, and real estate. They value Sagard's understanding of European private equity and their entrepreneurial spirit in building new businesses. This partnership not only involves ADQ and Sagard but also extends to Mr. Desmarais's family, who are prominent figures in Canada's business and financial landscape.