Egyptian financial conglomerate EFG Hermes, the largest brokerage firm in MENA, amongst other things, has made a minority investment in Kenzi Wealth, a Danish WealthTech start-up with an AI-enabled portfolio management app. EFG Hermes will integrate Kenzi's portfolio management solution with their EFG Hermes ONE trading platform.
We see this as a good example of corporate venture capital creating a win-win situation. EFG Hermes gets to delight their clients with an innovative solution that fills a feature gap in their product. Kenzi gains capital and access to a vast distribution network. And, although the terms of the deal were not announced, we suspect that EFG's investment will turn a tidy profit once the product is released to its vast client base.
While it was not clear from the announcement if EFG made the investment directly off their balance sheet or via a corporate venture capital arm, we feel that the latter is a more prudent way to capitalize on the trend of corporate minority investments driving innovation, partnership, and growth.
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