It has been an important few weeks for Iran. Many will reflect upon Tuesday, 14 July — the day the historic nuclear deal was signed — as the day the country began its process of gradual reintegration into the world’s economy.

For Xanyar Kamangar, it was a day when his decision to leave a well-paid job in London’s financial district to return home to Tehran finally made sense.

Just over 12 months ago Kamangar and two other co-founders — John Bateson (chairman) and Homan Harandian (CEO) — set up Griffon Capital, an asset management and corporate finance advisory firm that Kamangar says will facilitate investment into Iran, through mergers and acquisitions (M&A) and investment funds.

While hundreds of billions of dollars are expected to pour into Iran by way of investment in various sectors, Kamangar says it’s a country that has its own peculiar set of regulations and nuances, and a complex system of bureaucracy.

Being able to overcome the many lines of red tape and offer easy investment solutions was exactly why the three founding partners of Griffon Capital established the business, which specialises in technology, telecoms, consumer goods (food), beverages and pharmaceuticals, and operates between Tehran, Dubai and London. Describing it as a “conduit for foreign investment into Iran”, Kamangar says Griffon has established two funds of $100m each — a private equity/start-up fund that has $15m in soft commitments, and an equity fund that so far has $30m committed.

While the signing of the nuclear deal has long looked like being a foregone conclusion, Kamangar admits that they endured plenty of doubts along the way.

“When we started [in April 2014], there were just discussions [between Iran and the ‘5+1’ countries]. By September, October, everybody was very optimistic and everybody thought ‘this is it’, it’s going to happen,” he recalls. “At the end of October, everybody was thinking that there wasn’t going to be a deal. That was the low part of it, around November, because it looked very, very dark and looked like it might not happen in the short-term. But once we got to March, and with the intensity of negotiations, news was coming out, we were almost sure that it was a matter of time, not a matter of if,” he says.

While there was an MBA and eight years of working in investment banking for him to fall back on, Kamangar says he had essentially risked it all on the deal being signed.

“Personally it was a very big risk because it was a very secure job [a director position with Deutsche Bank] that I left to come here [to Tehran]. If the deal did not go through, it would have meant that I jeopardised everything. I was out there, I was slightly outspoken, so everybody knew that I was doing something in relation to Iran. It was a very big risk for me personally,” he says.

The company itself was established with help of $10m raised from nine “strategic investors” over the initial two-month period last year. For the investors, the risk was also there, but he says they have been patient and willing to wait on the ultimate plan being realised.

“In terms of our investors, what they said from day one was that we’re a very patient bunch and we’re optimists and we believe in the long-term potential of the market. That was the whole purpose of setting up Griffon and raising the capital, because we wanted to make sure that we can ramp up, build the infrastructure, build the team, have the proper processes and policies in place so that when the sanctions are lifted, we’re in pole position,” he says.

Through the two funds it has established, he says Griffon will offer investors a direct route into the Iranian market.

“If they are financial investors who want to have exposure to the Iranian economy, they can have that through two ways. Either the liquid assets [capital market], or play a more strategic role in the private equity type deals,” Kamangar says.

After a lengthy processing period, he says Griffon’s capital markets fund is fully licensed and regulated by the Securities and Exchange Organisation (SEO) of Iran.

“We got licences in the last seven or eight months that have not been granted to anyone in the last three to four years. We have been working with major law firms and have come a long way in terms of finalising the full structure while making sure all we do is sanctions-compliant,” he reveals.

Kamangar sees great potential for foreign investment in the Tehran stock exchange, which is valued at around $100bn (590 listed companies) but has less than 1 percent in foreign investment.

“Put that into context with somewhere like Turkey, which is a $200bn market with 60-70 percent foreign investment. It shows you the size of the opportunity,” he says.

“As soon as that first wave makes its way into the Iranian market, then you will see the bigger numbers making their way. They have to become comfortable with process, who is investing, which sectors you’re investing in, are the processes done right.”

In its relatively short period of operations Griffon has been able to close a $100m enterprise value (EV) deal for a company in the Iranian tech sector.

“This was a European fund coming and investing in a tech holding company that owns, amongst other things, the company called Digikala, which is the Amazon or Souq.com of Iran,” he says. “It was done at a valuation that was much higher than anyone expected. The implied valuation for Digikala for example was around $150m which was around 19 times the financing round, which was only 18 months before this deal.”

It’s the type of investment that he feels there could be more of in the coming years, mainly due to a burgeoning e-commerce market in Iran.

The reason, he says, lies in the changes made by former president Mahmoud Ahmadinejad towards the end of his government to reform the subsidies system. “We used to have subsidies on the basic items and services — petrol, bread, electricity, water, gas. What they said was ‘we’re going to go move away from the traditional subsidies system of subsidising everything’, which normally the rich benefit more [from] than the poor, and basically go towards handouts, which were given monthly to every Iranian adult — around $45 in back in Ahmadinejad’s time. Now the rial has devalued, that’s about $16 or $17,” Kamangar says.

But by reforming the subsidies system and the fact that everybody gets a handout every month, he says every Iranian adult now has a bank account and a debit card.

“Everyone is now paying their bills online,” he says. “With the right ingredients in place, e-commerce suddenly made a big leap in a matter of two to three years. Mobile penetration is now 120 percent. There are 30 million smartphones, with a million added every month. 65 percent of the population is under 35, so it’s very, very young, well-educated and very tech savvy. All the ingredients are there for a tech explosion.”

Iran’s e-commerce market is valued at just under $1bn, but it’s growing rapidly.

“Digikala, for example, is growing its sales by more than 100 percent every year now,” he says. “The Groupons of Iran [Takhfifan and Netbarg] are growing very quickly, the eBay [esam.ir] has again shown exponential growth. You’ve got all the ingredients there. People are craving the infrastructure and e-commerce solutions.”

Kamangar says the real benefits of the lifting of the sanctions, and the improvement in the economy, will be the ability of consumers to be able to purchase, which is where he sees the target for Griffon’s private equity fund.

“Anything that would have the exposure to the consumer is our target. That would be FMCG — (i.e.) food, beverage, retail, pharma and tech,” he says.

Kamangar says a massive conglomerate like Kuwait’s Alshaya — one of the major franchisees in the region — is a prime example of a company that could be a big player in the Iranian market, where major brands are available, but not in an official capacity.

“Any business that would replicate their [Alshaya] business would be super-successful here. What has happened so far is that you have major brands, whether in clothing, food or even some of the fast food chains. Some of them are here unofficially — say Zara, Mango, Massimo Dutti — they’re all here but they are not the actual franchises or their stores. A lot of people just go to the outlets, get the clothing, bring it here, put a mark-up of 200 percent on top of it and they sell it. The first thing that will happen is you’ll see the proper franchises coming to the market, which is 78 million people. It’s a massive market,” he says.

Malls are sprouting up right across the country, with somewhere in the region of 400 currently being built — 65 of which are in Tehran alone.

Kamangar describes the food and grocery retail sector in Iran as “completely fragmented”.

“These are all run by ‘mom and pop’ corner shops that are not part of a consolidated group, so the whole sector is ripe for consolidation right now,” he says.

Carrefour is in Iran through its joint venture with Majid Al Futtaim, with stores called Hyperstar, which are in every major mall. “They’ve changed the name basically to [Hyperstar], but it has all the same branding as Carrefour,” he says.

The first post-sanctions investors will be from northern Europe, says Kamangar, who he expects to inject somewhere in the region of $250m to $300m.

“For example, one of them is a Swedish investment fund that has been set up with a focus on investing in the Middle East, and specifically Iran. It has made many investments in Iran, or related to Iran, so far, and is raising more capital to be able to do more. These are guys who have made their money, for example, in Russia in the 1990s and 2000s, and see a lot of parallels in Iran opening up and the opportunities that that market will give them,” he says.

“Northern Europeans have traditionally been more adventurous. They went into Russia because of their proximity and they made a lot of money there. Because of that, they are just inherently very flexible. As an added bonus, there’s no backdrop of political issues as well.”

As for investors from the Middle East region, Kamangar says there may not be as many as part of that ‘first wave’.

“We have spoken to quite a few family offices and high net worth individuals, not institutions. We believe institutions are not going to be the first wave of investors in the Iranian market. So far, the indication of interest has been very, very good and we believe after Northern Europe, the GCC is going to be a second pool of money that is going to come into Iran,” he says.

“I was in Qatar a couple of weeks ago speaking to one of the biggest family offices there and they are now making an investment of $30m in the automotive sector. Iran has a very big automotive manufacturing base. The capacity is 1.6 million cars per year, which overshadows anything that’s possible in this part of the region,” he says.

The institutional money, Kamangar says, is going to be the game-changer that Griffon Capital is waiting for, but he doesn’t expect that to happen for another “18 to 24 months from now”.

“The primary focus is a clean structure, proper processes and best industry practices. So for us, it was very important to get the licence ourselves,” he says.

“All that we’re building here is to be able to attract the institutional money that will eventually come to Iran. That’s what our target is. The reason we went about getting our own licences, made sure all the processes and the structure that we have here is a plain structure, the policies are international best practices, and implementing those and building a team that has both international experience and domestically has the knowledge, is to be able to attract that big wall of money that will come to Iran.”