Citadel eyeing slice of $2.3trn market

With the global economy turning on its head in the past year, private sector investors have the unprecedented opportunity to participate in a rapidly growing consumer market comprising the world's 3.7 billion limited-income earners. "The billions of individuals who claim the smallest pool of the world's wealth represent, collectively, a rapidly-growing consumer market, an underutilised productive sector, and vast entrepreneurial energy," said Hisham El Khazindar, Co-Founder and Managing Director of the Egypt-based investment firm Citadel Capital. According to a report compiled by the World Economic Forum, globally, 3.7 billion people are largely excluded from formal markets. This group, earning $8 (Dh30) per day or less, comprises the "base of the pyramid" (BOP) in terms of income levels. With an annual income of $2.3 trillion a year that has grown at eight per cent in recent years, this market represents a substantial growth opportunity. Even in the context of a global economic downturn, the WEF expects this market to witness continued growth. If growth was to continue at the rate of eight per cent per year, by 2015, the aggregate income pool of today's BOP could increase to approximately $4trn. With $8.3 billion in investments under control, Citadel Capital "looks to address the broadest possible market whenever it makes an investment", El Khazindar told Emirates Business. "The BOP market offers a meeting ground where corporate economic benefit and social impact can be achieved together," the WEF report states. "Engaging these billions as producers, consumers and entrepreneurs is critical to both reducing poverty and driving wider economic growth," added El Khazindar. While he did not segregate returns from the base of the pyramid from the rest of Citadel Capital's private equity portfolio, he said: "The firm has generated more than $2.2bn in cash returns to investors since 2004." While the firm is currently pursuing a number of new investments, including potential acquisitions, Citadel declined to comment on investments that are still in the pipeline. However, the firm maintained it sees opportunities in sectors as diverse as agriculture, mining, healthcare and energy distribution. Keep up with the latest business news from the region with the daily Emirates Business 24|7 newsletter. To subscribe to the newsletter, please click here .