MENA private equity Continues to show robust growth
Private equity in the MENA region in general and the GCC in particular, has continued its robust growth in 2006 and 2007 on the fund raising front, as well as fund sizes. This growth was made possible due to a lot of factors, mainly the increase in liquidity in the GCC region on the back of the recent surge in high oil prices. Other factors that contributed to the private equity rise relates to the governments’ initiatives to foster this sector through privatizations, also the efforts exerted by fund managers and investment firms to encourage private equity as means of financing.
The GCC countries have also realized the importance of involving the private sector in this restructuring, so privatization has also played a pivotal part in the process. The diversification of their economic bases has most importantly led the GCC countries on a race towards the “financial capital of the GCC”, thus, easing regulations in terms of foreign interests in the regional financial sector. This has provided the right catalysts for the GCC economies to embark on restructuring their financial sectors, hence new regulations were imposed, financial systems were upgraded to allow for new financial instruments, and a myriad of financial companies have launched their products in the region.
These recent trends in the GCC, had a positive spill-over effects on the Middle East and North Africa (MENA) regions. MENA countries have adopted “openness” to their economic and financial sectors, which gave cash rich private equity managers the incentive to seek investment opportunities within the region. To that end, private equity funds that invest in the MENA region have increased tremendously in numbers and sizes, whereby US$13bn in private equity capital are currently under management in the region and has been raised in 2005 and 2006.
As per a recent report produced by the Gulf Venture Capital Association in collaboration with KPMG, data extracted from Zawya, a leading source for financial data in the MENA, on private equity indicates that the total capital raised by private equity funds in 2006 reached US$7,075mn. This has increased by 61.6% from its level in 2005 of US$4,379mn.
Sizes of private equity funds in the MENA region have also exhibited an increase, where total fund sizes have reached the US$14bn mark, and as of June 2007 fund sizes is at US9bn. These are significant developments in the MENA private equity sector given that total fund sizes was at US$78mn in 2001, an increase of 121 folds. Two important reasons for this surge in fund sizes, the first relates to the increase in the number of private equity funds in the region, and the other relates to the increase in the sizes of the funds in the MENA region.
Throughout the period of 1994-2007, the majority of the private equity funds in the MENA region are in the “Investing” phase, where 55 funds with a total size value of US$12,717mn, 40.6% of total value, are classified as part of the group. Funds that are in the “fund raising” stage throughout the same period in the MENA region constituted 28.3% of total value of funds. Fully vested private equity funds in the MENA have a combined total of US$629mn, 2% of total fund sizes, while funds that are in the liquidation process are only 2, and they have a combined value of US$58mn. Announced private equity funds in the MENA region through 1994-2006 are concentrated in the years 2006 and 2007, and they have a combined size of US$3,842mn, which constitutes 12.3% of the total fund sizes of private equity funds in the region. Closed funds, on the other hand, constitute a mere 1.8% of the total size of private equity funds in the MENA region with a combined value of US$554mn.
The private equity industry in the MENA region does not only seek investment opportunities in the region. Private equity managers have also been tracing absolute returns worldwide, given the maturities of the US and UK markets, and the ample of opportunities in Asia, particularly China and India. It is also important to mention that the private equity in the MENA region is relatively a new phenomenon compared with the US and Europe, hence, the reluctance of family owned business to sell the interests in the companies is still widespread. It is only recently that individuals came to grip with the concept of “going public” and the advantages it has within its folds.
MENA private equity deals in the MENA region conducted by private equity managers domiciled in MENA, it is evident that the combined total of deals were focused on Egypt with 61.6% share of total deals in 2006 and 2007. The United Arab Emirates was the next country of attraction to private equity deals in 2006 and 2007 where 15.3% of total deals flows were directed to that country, followed by KSA at 10.3%, Bahrain at 4.3%, Kuwait 2.1%, Jordan 1.3%, and the rest of the MENA region drew less than 1% each in private equity deals from local fund managers.
The basic materials sector took the largest share of private equity deals in terms of value in 2006 and 2007 combined. The real estate sector attracted 16.4% private equity capital from MENA private equity managers. A lot of activity characterized the real estate sector in terms of private equity deals targeting the said sector where a total of 16 private equity deals were closed in 2006 and 2007. The financial services sector was also a favorite destination for MENA private equity managers. A total of 19 deals were done during the years 2006 and 2007 with a total value of US$1.7bn for disclosed deals.
There are a limited number of exit strategies for private equity investments, namely through Initial Public Offerings (IPO), through the sale of the private equity manager’s stakes to other asset managers or individuals, and through mergers and acquisitions. As far as the MENA private equity is concerned, it is important to realize that the aforementioned industry is still in its early stages and hence very few transactions have been “exited”. The Annual report by GVCA and KPMG on MENA private equity 2006 indicates that only 5% (US$0.3bn) of deals since 1998 have been realized on exit. It is now that we expect some private equity deals have reached the maturity stage and private equity managers will be looking at ways they can exit these investments with highest returns feasible. A very important factor that has helped the private equity managers realize impressive returns on their investments is the vibrant IPO market in the MENA region.
As mentioned above, the governments in the MENA region in general, and the GCC in particular, have taken massive efforts to regulate their financial markets and enhance the privatization efforts. This have reflected positively on the IPO market in the MENA where demand for new offerings by local and regional investors continues to outstrip supply, and all IPO’s have been oversubscribed by several folds. Going forward. It is expected that the charged IPO momentum in the GCC will proceed, albeit not with the same vigor experienced in 2005. Nevertheless, the general trend indicates a vibrant IPO market in the GCC, which consequently prepares the playground for private equity managers to exit their investments that are fast reaching their maturity stages.
29.6.07
Bahrain to host new Investment Bank Headquarters
MANAMA: Bahrain has been chosen as the headquarters of a new Islamic investment bank, it was announced yesterday. With a paid-in capital of $250 million and authorised share capital of $500m, Global Banking Corporation (GBCORP), will be one of the largest banks in the kingdom and one of the biggest Sharia-compliant finance houses in the Gulf.
It is also the 400th financial institution to receive a licence to operate in Bahrain.
The investment bank will gradually roll out its business lines over the next two years, say executives, initially focusing on real estate and infrastructure development, private equity and venture capital, and then moving into asset and wealth management, advisory services and wealth management.
GBCORP also plans to expand geographically, tapping into the estimated $500 billion worldwide market for Islamic finance.
Key targets include governments, private and public sector enterprises, wealthy family groups and high net worth individuals."
"The bank will use the booming GCC economies as a springboard for expansion into Asia, North Africa and Europe," said GBCORP chairman Saleh Al Ali Al Rashid.
There are unlikely to be many obstacles to regional expansion - more than 50 Gulf institutions have contributed to the bank's initial capital, of which $125m has been called immediately, according to the bank's vice-chairman Abdulrahman Al Jasmi.
The next step will be to look for potential partners in Asia and Europe.
"In terms of expanding our business through strategic partnerships, we plan to leverage our (the board's) respective relationships in areas such as Hong Kong and Asia, as well of course as the Gulf," the bank's chief executive Mark Hanson told the GDN.
Mr Hanson joins the bank from Saudi Hollandi Bank, where he was head of corporate finance. However, he has considerable experience of the Asian market as a former head of listings at the Hong Kong Stock Exchange prior to the British handover to China in 1997.
Mr Al Rashed is a former deputy governor of Capital Trust in Luxembourg, and sits on the boards of a wide range of Saudi industrial and services companies.
The bank's strategy will be to tailor its services to different markets, said Mr Al Jasmi. For example, its initial focus on private equity and project financing is focused on the current needs of the Gulf.
"With $2.3 billion raised in private equity funds in the GCC between 2002 and 2005, GBCORP sees family owned businesses and established private companies looking for outside investors or major capital investment as a valuable source of business " he said.
The bank plans to grow its portfolio management group as it expands into Europe and Asia, he said.
Welcoming GBCORP to Bahrain, Central Bank of Bahrain licensing director Ahmed Aziz Al Bassam said it was the 400th financial institution to have been awarded a licence to operate in the kingdom. business@gdn.com.bh
By DIGBY LIDSTONE
It is also the 400th financial institution to receive a licence to operate in Bahrain.
The investment bank will gradually roll out its business lines over the next two years, say executives, initially focusing on real estate and infrastructure development, private equity and venture capital, and then moving into asset and wealth management, advisory services and wealth management.
GBCORP also plans to expand geographically, tapping into the estimated $500 billion worldwide market for Islamic finance.
Key targets include governments, private and public sector enterprises, wealthy family groups and high net worth individuals."
"The bank will use the booming GCC economies as a springboard for expansion into Asia, North Africa and Europe," said GBCORP chairman Saleh Al Ali Al Rashid.
There are unlikely to be many obstacles to regional expansion - more than 50 Gulf institutions have contributed to the bank's initial capital, of which $125m has been called immediately, according to the bank's vice-chairman Abdulrahman Al Jasmi.
The next step will be to look for potential partners in Asia and Europe.
"In terms of expanding our business through strategic partnerships, we plan to leverage our (the board's) respective relationships in areas such as Hong Kong and Asia, as well of course as the Gulf," the bank's chief executive Mark Hanson told the GDN.
Mr Hanson joins the bank from Saudi Hollandi Bank, where he was head of corporate finance. However, he has considerable experience of the Asian market as a former head of listings at the Hong Kong Stock Exchange prior to the British handover to China in 1997.
Mr Al Rashed is a former deputy governor of Capital Trust in Luxembourg, and sits on the boards of a wide range of Saudi industrial and services companies.
The bank's strategy will be to tailor its services to different markets, said Mr Al Jasmi. For example, its initial focus on private equity and project financing is focused on the current needs of the Gulf.
"With $2.3 billion raised in private equity funds in the GCC between 2002 and 2005, GBCORP sees family owned businesses and established private companies looking for outside investors or major capital investment as a valuable source of business " he said.
The bank plans to grow its portfolio management group as it expands into Europe and Asia, he said.
Welcoming GBCORP to Bahrain, Central Bank of Bahrain licensing director Ahmed Aziz Al Bassam said it was the 400th financial institution to have been awarded a licence to operate in the kingdom. business@gdn.com.bh
By DIGBY LIDSTONE
19.6.07
Record Energy Prices, Liquidity To Drive MidEast Private Equity Fundraising To US $25 Billion In Near Term
Record Energy Prices, Liquidity To Drive MidEast Private Equity Fundraising To US $25 Billion In Near Term
Ithmar Capital And Dow Jones Launch GCC Private Equity Economic Impact Report
Dubai, UAE - June 18, 2007: The Arabian Gulf’s private equity market remains under-developed, according to a landmark thought-leadership report, “ The Impact of Private Equity on the GCC”, produced by Ithmar Capital, the GCC-focused private equity firm and Dow Jones, a leading provider of global business news and information services.
The report – the first in a twice-yearly series – tracks the impact of private equity on the GCC.
The initial impact report maintains: “The private equity market in the GCC is currently underdeveloped compared to other geographies and accounts for only a small proportion of the region’s overall economic activity. Fundraising in the GCC area reached US $10 billion in 2006, accounting for just under a third of the total US $33.2 billion raised across the emerging markets of Asia, Eastern Europe, Latin America and the MENA region.”
And in a bullish forecast, the report says private equity in the GCC is expected to grow as a result of rapid economic growth and restructuring, high liquidity from record energy prices, significant fiscal and trade surpluses and heightened interest in the region from international firms looking to hedge investment risks and compete globally.
“In consequence, fundraising is exhibiting strong growth with 41% of the funds raised between 1994 and 2005 raised in the final year of this period, and this US $5.8 billion total then almost doubling in 2006. Estimates for private equity fundraising in the Middle East converge on a total of US $25 billion in the near future,” says the report.
And the report points to some specific benefits from a growth of private equity in the GCC including, improved economic diversification and support for the existing positive liquidity climate as well as for growth of a viable private sector.
“GCC states have identified assets valued at more than US $1 trillion for privatization, and public infrastructure accounted for more than 60% of new funds raised by regional private equity firms in 2006. Governments in the region are also likely to look to external capital sources to address shortfalls in infrastructure financing and growing pressure on public resources attendant on the GCC’s rapid population growth,” says the report.
The thought-leadership report provides an in-depth analysis of private equity in the GCC, its effects on regional economies and the future outlook, taking into account the lessons learned from previous scenarios in mature markets, such as Europe and the US. The initial impact report features interviews with select regional decision-makers including CEOs, family business owners and industry leaders.
“The input of this select focus group delivers tremendous value and expertise, and brings a multi-dimensional approach to assess where precisely the private equity industry in the GCC is heading,” explained Faisal Belhoul, Ithmar’s Co-Founder and Managing Partner. “The report constitutes a landmark in the understanding of the impact of a specialised asset class on a rapidly developing region, and the informed views and expertise it contains afford a real insight into future regional industry direction.”
The report series will chart the growth of private investment and fundraising in the Middle East, identify economic driving factors, quantify liquidity levels and fundraising, assess sectors of interest and outline investment challenges.
“As the private equity sector is still in the early stages of development in the GCC, there are tremendous opportunities in areas such as industry consolidation, cross-border expansion and buy-and-build scenarios but there needs to be a greater understanding of the possibilities to bring these to fruition. This report will go some way to addressing the knowledge gap and empowering solid business decision going forward,” explained Ranjit Bhonsle, Director, Ithmar Capital.
Over recent years private equity has gained increasing acceptance as a means of financing growth, adding value and aiding the transformation of family-owned businesses to more corporate concerns.
“This unprecedented growth requires greater understanding of the industry, and a lack of discernable information in the market makes it increasingly difficult for investors and other stakeholders to make educated decisions,” said Jessica Canning Director of Global Research, Dow Jones.
“The report from Ithmar Capital and Dow Jones addresses this palpable lack of quality information by examining the trends in this growing market through consultation and analysis and endeavours to carve out a logical path and consensus.”
Copies of the report are available at Ithmar Capital or electronically via the company’s website – www.ithmar.com.
Ithmar Capital And Dow Jones Launch GCC Private Equity Economic Impact Report
Dubai, UAE - June 18, 2007: The Arabian Gulf’s private equity market remains under-developed, according to a landmark thought-leadership report, “ The Impact of Private Equity on the GCC”, produced by Ithmar Capital, the GCC-focused private equity firm and Dow Jones, a leading provider of global business news and information services.
The report – the first in a twice-yearly series – tracks the impact of private equity on the GCC.
The initial impact report maintains: “The private equity market in the GCC is currently underdeveloped compared to other geographies and accounts for only a small proportion of the region’s overall economic activity. Fundraising in the GCC area reached US $10 billion in 2006, accounting for just under a third of the total US $33.2 billion raised across the emerging markets of Asia, Eastern Europe, Latin America and the MENA region.”
And in a bullish forecast, the report says private equity in the GCC is expected to grow as a result of rapid economic growth and restructuring, high liquidity from record energy prices, significant fiscal and trade surpluses and heightened interest in the region from international firms looking to hedge investment risks and compete globally.
“In consequence, fundraising is exhibiting strong growth with 41% of the funds raised between 1994 and 2005 raised in the final year of this period, and this US $5.8 billion total then almost doubling in 2006. Estimates for private equity fundraising in the Middle East converge on a total of US $25 billion in the near future,” says the report.
And the report points to some specific benefits from a growth of private equity in the GCC including, improved economic diversification and support for the existing positive liquidity climate as well as for growth of a viable private sector.
“GCC states have identified assets valued at more than US $1 trillion for privatization, and public infrastructure accounted for more than 60% of new funds raised by regional private equity firms in 2006. Governments in the region are also likely to look to external capital sources to address shortfalls in infrastructure financing and growing pressure on public resources attendant on the GCC’s rapid population growth,” says the report.
The thought-leadership report provides an in-depth analysis of private equity in the GCC, its effects on regional economies and the future outlook, taking into account the lessons learned from previous scenarios in mature markets, such as Europe and the US. The initial impact report features interviews with select regional decision-makers including CEOs, family business owners and industry leaders.
“The input of this select focus group delivers tremendous value and expertise, and brings a multi-dimensional approach to assess where precisely the private equity industry in the GCC is heading,” explained Faisal Belhoul, Ithmar’s Co-Founder and Managing Partner. “The report constitutes a landmark in the understanding of the impact of a specialised asset class on a rapidly developing region, and the informed views and expertise it contains afford a real insight into future regional industry direction.”
The report series will chart the growth of private investment and fundraising in the Middle East, identify economic driving factors, quantify liquidity levels and fundraising, assess sectors of interest and outline investment challenges.
“As the private equity sector is still in the early stages of development in the GCC, there are tremendous opportunities in areas such as industry consolidation, cross-border expansion and buy-and-build scenarios but there needs to be a greater understanding of the possibilities to bring these to fruition. This report will go some way to addressing the knowledge gap and empowering solid business decision going forward,” explained Ranjit Bhonsle, Director, Ithmar Capital.
Over recent years private equity has gained increasing acceptance as a means of financing growth, adding value and aiding the transformation of family-owned businesses to more corporate concerns.
“This unprecedented growth requires greater understanding of the industry, and a lack of discernable information in the market makes it increasingly difficult for investors and other stakeholders to make educated decisions,” said Jessica Canning Director of Global Research, Dow Jones.
“The report from Ithmar Capital and Dow Jones addresses this palpable lack of quality information by examining the trends in this growing market through consultation and analysis and endeavours to carve out a logical path and consensus.”
Copies of the report are available at Ithmar Capital or electronically via the company’s website – www.ithmar.com.
Record Energy Prices, Liquidity To Drive MidEast Private Equity Fundraising To US $25 Billion In Near TermIthmar Capital And Dow Jones Launch GCC Pri
Record Energy Prices, Liquidity To Drive MidEast Private Equity Fundraising To US $25 Billion In Near Term
Ithmar Capital And Dow Jones Launch GCC Private Equity Economic Impact Report
Dubai, UAE - June 18, 2007: The Arabian Gulf’s private equity market remains under-developed, according to a landmark thought-leadership report, “ The Impact of Private Equity on the GCC”, produced by Ithmar Capital, the GCC-focused private equity firm and Dow Jones, a leading provider of global business news and information services.
The report – the first in a twice-yearly series – tracks the impact of private equity on the GCC.
The initial impact report maintains: “The private equity market in the GCC is currently underdeveloped compared to other geographies and accounts for only a small proportion of the region’s overall economic activity. Fundraising in the GCC area reached US $10 billion in 2006, accounting for just under a third of the total US $33.2 billion raised across the emerging markets of Asia, Eastern Europe, Latin America and the MENA region.”
And in a bullish forecast, the report says private equity in the GCC is expected to grow as a result of rapid economic growth and restructuring, high liquidity from record energy prices, significant fiscal and trade surpluses and heightened interest in the region from international firms looking to hedge investment risks and compete globally.
“In consequence, fundraising is exhibiting strong growth with 41% of the funds raised between 1994 and 2005 raised in the final year of this period, and this US $5.8 billion total then almost doubling in 2006. Estimates for private equity fundraising in the Middle East converge on a total of US $25 billion in the near future,” says the report.
And the report points to some specific benefits from a growth of private equity in the GCC including, improved economic diversification and support for the existing positive liquidity climate as well as for growth of a viable private sector.
“GCC states have identified assets valued at more than US $1 trillion for privatization, and public infrastructure accounted for more than 60% of new funds raised by regional private equity firms in 2006. Governments in the region are also likely to look to external capital sources to address shortfalls in infrastructure financing and growing pressure on public resources attendant on the GCC’s rapid population growth,” says the report.
The thought-leadership report provides an in-depth analysis of private equity in the GCC, its effects on regional economies and the future outlook, taking into account the lessons learned from previous scenarios in mature markets, such as Europe and the US. The initial impact report features interviews with select regional decision-makers including CEOs, family business owners and industry leaders.
“The input of this select focus group delivers tremendous value and expertise, and brings a multi-dimensional approach to assess where precisely the private equity industry in the GCC is heading,” explained Faisal Belhoul, Ithmar’s Co-Founder and Managing Partner. “The report constitutes a landmark in the understanding of the impact of a specialised asset class on a rapidly developing region, and the informed views and expertise it contains afford a real insight into future regional industry direction.”
The report series will chart the growth of private investment and fundraising in the Middle East, identify economic driving factors, quantify liquidity levels and fundraising, assess sectors of interest and outline investment challenges.
“As the private equity sector is still in the early stages of development in the GCC, there are tremendous opportunities in areas such as industry consolidation, cross-border expansion and buy-and-build scenarios but there needs to be a greater understanding of the possibilities to bring these to fruition. This report will go some way to addressing the knowledge gap and empowering solid business decision going forward,” explained Ranjit Bhonsle, Director, Ithmar Capital.
Over recent years private equity has gained increasing acceptance as a means of financing growth, adding value and aiding the transformation of family-owned businesses to more corporate concerns.
“This unprecedented growth requires greater understanding of the industry, and a lack of discernable information in the market makes it increasingly difficult for investors and other stakeholders to make educated decisions,” said Jessica Canning Director of Global Research, Dow Jones.
“The report from Ithmar Capital and Dow Jones addresses this palpable lack of quality information by examining the trends in this growing market through consultation and analysis and endeavours to carve out a logical path and consensus.”
Copies of the report are available at Ithmar Capital or electronically via the company’s website – www.ithmar.com.
Ithmar Capital And Dow Jones Launch GCC Private Equity Economic Impact Report
Dubai, UAE - June 18, 2007: The Arabian Gulf’s private equity market remains under-developed, according to a landmark thought-leadership report, “ The Impact of Private Equity on the GCC”, produced by Ithmar Capital, the GCC-focused private equity firm and Dow Jones, a leading provider of global business news and information services.
The report – the first in a twice-yearly series – tracks the impact of private equity on the GCC.
The initial impact report maintains: “The private equity market in the GCC is currently underdeveloped compared to other geographies and accounts for only a small proportion of the region’s overall economic activity. Fundraising in the GCC area reached US $10 billion in 2006, accounting for just under a third of the total US $33.2 billion raised across the emerging markets of Asia, Eastern Europe, Latin America and the MENA region.”
And in a bullish forecast, the report says private equity in the GCC is expected to grow as a result of rapid economic growth and restructuring, high liquidity from record energy prices, significant fiscal and trade surpluses and heightened interest in the region from international firms looking to hedge investment risks and compete globally.
“In consequence, fundraising is exhibiting strong growth with 41% of the funds raised between 1994 and 2005 raised in the final year of this period, and this US $5.8 billion total then almost doubling in 2006. Estimates for private equity fundraising in the Middle East converge on a total of US $25 billion in the near future,” says the report.
And the report points to some specific benefits from a growth of private equity in the GCC including, improved economic diversification and support for the existing positive liquidity climate as well as for growth of a viable private sector.
“GCC states have identified assets valued at more than US $1 trillion for privatization, and public infrastructure accounted for more than 60% of new funds raised by regional private equity firms in 2006. Governments in the region are also likely to look to external capital sources to address shortfalls in infrastructure financing and growing pressure on public resources attendant on the GCC’s rapid population growth,” says the report.
The thought-leadership report provides an in-depth analysis of private equity in the GCC, its effects on regional economies and the future outlook, taking into account the lessons learned from previous scenarios in mature markets, such as Europe and the US. The initial impact report features interviews with select regional decision-makers including CEOs, family business owners and industry leaders.
“The input of this select focus group delivers tremendous value and expertise, and brings a multi-dimensional approach to assess where precisely the private equity industry in the GCC is heading,” explained Faisal Belhoul, Ithmar’s Co-Founder and Managing Partner. “The report constitutes a landmark in the understanding of the impact of a specialised asset class on a rapidly developing region, and the informed views and expertise it contains afford a real insight into future regional industry direction.”
The report series will chart the growth of private investment and fundraising in the Middle East, identify economic driving factors, quantify liquidity levels and fundraising, assess sectors of interest and outline investment challenges.
“As the private equity sector is still in the early stages of development in the GCC, there are tremendous opportunities in areas such as industry consolidation, cross-border expansion and buy-and-build scenarios but there needs to be a greater understanding of the possibilities to bring these to fruition. This report will go some way to addressing the knowledge gap and empowering solid business decision going forward,” explained Ranjit Bhonsle, Director, Ithmar Capital.
Over recent years private equity has gained increasing acceptance as a means of financing growth, adding value and aiding the transformation of family-owned businesses to more corporate concerns.
“This unprecedented growth requires greater understanding of the industry, and a lack of discernable information in the market makes it increasingly difficult for investors and other stakeholders to make educated decisions,” said Jessica Canning Director of Global Research, Dow Jones.
“The report from Ithmar Capital and Dow Jones addresses this palpable lack of quality information by examining the trends in this growing market through consultation and analysis and endeavours to carve out a logical path and consensus.”
Copies of the report are available at Ithmar Capital or electronically via the company’s website – www.ithmar.com.
Gulf Capital announces earnings of AED53.7 Million and five major acquisitions in its first year of operation
Gulf Capital, one of the largest and most active private equity firms in the Middle East, today announced sales of AED472.6 million and a net profit of AED53.7 million for its first year of operation, ended on March 31st, 2007. Earnings per share amounted to AED 0.44, while total equity stood at AED1,307.3 million and total assets at AED1,748.8 million.
Outlining the progress made by the Company, Mr. Hareb Al Darmaki, Chairman of Gulf Capital, said: "In the space of twelve months, Gulf Capital has launched its operations, built a robust infrastructure, assembled a seasoned team of investment professionals, secured five major acquisitions and rapidly emerged as one of the most active private equity firms in the Middle East."
"Since our first day of inception, Gulf Capital had one clear goal: to emerge as the largest and most sophisticated alternative investment firm in the Middle East. Our 282 shareholders-partners, directors and investment professionals have all joined us in our efforts to build a best-in-class institution that shines by regional and international standards."
By focusing on acquiring superior assets with excellent upside potential at fair valuations, Gulf Capital has closed five major transactions in its first year of operation. The value of these five investments is worth more than AED650 million - representing 54% of the Firm's capital -and include stakes in the market leaders in several high-growth sectors in the GCC.
Acquisitions completed to date include Metito Holding Ltd. (Metito), the largest privately held water engineering and utility company in the Middle East and North Africa; Maritime Industrial Services Co. Ltd. Inc. (MIS), a fully integrated onshore and offshore engineering, procurement, fabrication, construction and shipyard service provider; Itsalat International (i2), the largest multi-brand distributor of mobile handsets in the Middle Eastern and African regions, and Gulf Marine Services (GMS), the leading jack-up barge and offshore support vessel operating company in the UAE.
Dr. Karim El Solh, Chief Executive Officer of Gulf Capital said: "As a partner in growth we are committed to delivering superior risk-adjusted returns to our clients and shareholders by unlocking the full potential of these companies. Looking back at the string of acquisitions Gulf Capital has completed in the last year, we are particularly proud of the quality and the diversified composition of our portfolio. We have acquired significant stakes in the market leaders in the most promising sectors in the Gulf region: Telecommunication, Water and Wastewater, Oil & Gas and Construction. This is a well-balanced portfolio of dominant and profitable companies with leading market share (either No. 1 or 2 in their field) and strong exit potential (via IPOs or trade sales). The investment criteria we set out for Gulf Capital at inception seemed very stringent but we are pleased with our progress to date in meeting these criteria."
The strength of Gulf Capital stems from its ability to capitalize on the comprehensive international know-how and strong regional insight of its seasoned Investment and post acquisition teams, coupled with the first-hand experience of its Industry Advisory Board members who in their own rights are industry authorities. "Our Industry advisory board comprises some of the most illustrious and knowledgeable industry experts who advise us on particular transactions and assist us in managing, restructuring and growing our portfolio companies," Dr. El Solh continued.
One of the many highlights that Gulf Capital has experienced in its first year of operation is the successful flotation of MIS on the Oslo Main Bourse in Norway, the first Gulf based company to go public in Norway. "With the successful MIS floatation and other anticipated exits in the year to come, we have proven our ability not only to source but also to grow and exit investments successfully and profitably. Gulf Capital is firmly established today as one of the largest and most dynamic private equity firms in the Middle East," concluded Dr. El Solh.
Outlining the progress made by the Company, Mr. Hareb Al Darmaki, Chairman of Gulf Capital, said: "In the space of twelve months, Gulf Capital has launched its operations, built a robust infrastructure, assembled a seasoned team of investment professionals, secured five major acquisitions and rapidly emerged as one of the most active private equity firms in the Middle East."
"Since our first day of inception, Gulf Capital had one clear goal: to emerge as the largest and most sophisticated alternative investment firm in the Middle East. Our 282 shareholders-partners, directors and investment professionals have all joined us in our efforts to build a best-in-class institution that shines by regional and international standards."
By focusing on acquiring superior assets with excellent upside potential at fair valuations, Gulf Capital has closed five major transactions in its first year of operation. The value of these five investments is worth more than AED650 million - representing 54% of the Firm's capital -and include stakes in the market leaders in several high-growth sectors in the GCC.
Acquisitions completed to date include Metito Holding Ltd. (Metito), the largest privately held water engineering and utility company in the Middle East and North Africa; Maritime Industrial Services Co. Ltd. Inc. (MIS), a fully integrated onshore and offshore engineering, procurement, fabrication, construction and shipyard service provider; Itsalat International (i2), the largest multi-brand distributor of mobile handsets in the Middle Eastern and African regions, and Gulf Marine Services (GMS), the leading jack-up barge and offshore support vessel operating company in the UAE.
Dr. Karim El Solh, Chief Executive Officer of Gulf Capital said: "As a partner in growth we are committed to delivering superior risk-adjusted returns to our clients and shareholders by unlocking the full potential of these companies. Looking back at the string of acquisitions Gulf Capital has completed in the last year, we are particularly proud of the quality and the diversified composition of our portfolio. We have acquired significant stakes in the market leaders in the most promising sectors in the Gulf region: Telecommunication, Water and Wastewater, Oil & Gas and Construction. This is a well-balanced portfolio of dominant and profitable companies with leading market share (either No. 1 or 2 in their field) and strong exit potential (via IPOs or trade sales). The investment criteria we set out for Gulf Capital at inception seemed very stringent but we are pleased with our progress to date in meeting these criteria."
The strength of Gulf Capital stems from its ability to capitalize on the comprehensive international know-how and strong regional insight of its seasoned Investment and post acquisition teams, coupled with the first-hand experience of its Industry Advisory Board members who in their own rights are industry authorities. "Our Industry advisory board comprises some of the most illustrious and knowledgeable industry experts who advise us on particular transactions and assist us in managing, restructuring and growing our portfolio companies," Dr. El Solh continued.
One of the many highlights that Gulf Capital has experienced in its first year of operation is the successful flotation of MIS on the Oslo Main Bourse in Norway, the first Gulf based company to go public in Norway. "With the successful MIS floatation and other anticipated exits in the year to come, we have proven our ability not only to source but also to grow and exit investments successfully and profitably. Gulf Capital is firmly established today as one of the largest and most dynamic private equity firms in the Middle East," concluded Dr. El Solh.
17.6.07
ne of the first private equity funds targeting the GCC Rasmala Private Equity- UAE
(MENAFN Press) Rasmala Investments announced in Dubai yesterday the successful wind up of the Rasmala Private Equity Fund 1, a fund launched in the year 2000 with the objective of investing in the financial services sector in the GCC.
"We returned to investors over 3 times their capital in just over 6 years, equating to an annual return (IRR) of 22% per annum" commented Ali al Shihabi, Founder and CEO of Rasmala Investments. "This achievement over a prolonged period of tremendous volatility in regional markets and in an asset class that had hardly existed in this region before the launch of this Fund is something Rasmala is justifiably proud of" said al Shihabi.
Having established, managed and successfully paid off, probably, the first formal Private Equity Fund targeting the GCC, Rasmala is one of the pioneers of this asset class in the region.
"This has given us practical insight and experience which we will bring to bear in our private equity activities going forward" said al Shihabi.
"The GCC economies are experiencing tremendous growth, the markets are continuing to open up to foreign investment and regulatory reform is progressing. This environment will provide Rasmala with the opportunity to play an ever increasing role in Private Equity by restructuring businesses to maximize shareholder value or helping companies to build scale to withstand upcoming regional and global competitors. Rasmala will continue to undertake private equity transactions on a deal-by-deal basis, and is also planning to launch, by year end, two sector focused Private Equity funds, in partnership with prominent regional industry operators" announced al Shihabi.
Rasmala Investments, a Dubai based Investment Bank, currently manages eight Funds in regional and global markets. Its activities include Investment Banking, Private Equity, Asset Management and Brokerage. Rasmala has operating subsidiaries in Riyadh and London.
"We returned to investors over 3 times their capital in just over 6 years, equating to an annual return (IRR) of 22% per annum" commented Ali al Shihabi, Founder and CEO of Rasmala Investments. "This achievement over a prolonged period of tremendous volatility in regional markets and in an asset class that had hardly existed in this region before the launch of this Fund is something Rasmala is justifiably proud of" said al Shihabi.
Having established, managed and successfully paid off, probably, the first formal Private Equity Fund targeting the GCC, Rasmala is one of the pioneers of this asset class in the region.
"This has given us practical insight and experience which we will bring to bear in our private equity activities going forward" said al Shihabi.
"The GCC economies are experiencing tremendous growth, the markets are continuing to open up to foreign investment and regulatory reform is progressing. This environment will provide Rasmala with the opportunity to play an ever increasing role in Private Equity by restructuring businesses to maximize shareholder value or helping companies to build scale to withstand upcoming regional and global competitors. Rasmala will continue to undertake private equity transactions on a deal-by-deal basis, and is also planning to launch, by year end, two sector focused Private Equity funds, in partnership with prominent regional industry operators" announced al Shihabi.
Rasmala Investments, a Dubai based Investment Bank, currently manages eight Funds in regional and global markets. Its activities include Investment Banking, Private Equity, Asset Management and Brokerage. Rasmala has operating subsidiaries in Riyadh and London.
GCC's reserves to hit $3 trillion
DUBAI — The GCC countries, riding the crest of unprecedented economic prosperity underpinned by soaring oil revenues, have surpassed even China's mammoth $1,100 billion of foreign reserves to register a record $1,600 billion in foreign assets, a new report from the Institute of International Finance said.
According to financial experts, given the huge inflow of cash due to higher crude prices in the global markets, the current account surplus of the six Gulf countries will soon touch the $3 trillion mark.
"The most formidable challenge facing the GCC states is dynamic management of their reserves, which are likely to soar to an astronomical $3 trillion, larger than all of Asia, by the end of the decade. However, handling the massive wealth in a prudent way poses a big challenge," said Mohsen Fahmi, from the US-based Moore Capital Management, while addressing a conference on 'Enriching the Middle East's Economic Future' in Doha recently.
While the IIF report attempted to assess how the GCC countries had deployed their "oil windfall" in recent years, Fahmi urged GCC countries to use these reserves productively within the region and globally. "To invest this much money ($3 trillion), you have to be a leader. So, try and invest in avenues like education," Fahmi said.
Citing an International Monetary Fund (IMF) report on the region, he said with the oil income of the GCC states increasing due to higher crude prices, their spending also increases. However, before you invest in setting up centers of higher learning like a university, invest in primary and secondary education, since universities would be requiring qualified teachers and quality students, he said.
Making a comparison between the earlier oil booms in the 1970s and 80s and the current one, Koch-Weser, a former German deputy finance minister and presently vice-chairman of Deutsche Bank, said that the former did not have any lasting impact on the region since they were short-lived.
"The current boom is radically different in the sense that the GCC states are investing in crucial assets like social, financial and physical infrastructure and creating a social safety net. And a noticeable shift in investment is being witnessed and it is flowing eastwards and not westwards, as has been the case earlier."
Koch-Weser said that it is expected that over the next five years, Gulf investors will pump close to $250 billion worth of investments in Asian nations.
The IIF report noted an "extraordinary deficiency" of information on the capital flows and foreign asset holdings of the GCC's members, namely Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE. As well as traditional dollar investments, the IIF said evidence also suggested the six countries had "a strong interest in investments in emerging markets, particularly in the Middle East region and east Asia." The UAE, Saudi Arabia and Kuwait account for the bulk of the GCC's $1,550 billion of foreign asset holdings, according to the IIF. The overall holdings represented 225 per cent of the GCC's gross domestic product while China's foreign reserves represented 42 per cent of GDP. More generally, the IIF said that private capital flows to emerging markets were on track to match last year's record of more than $550 billion, a sign of a generally positive economic environment.
Josef Ackermann, chairman of the IIF's board of directors and of Deutsche Bank's management board, said there were vulnerabilities in the economic outlook.
"There are risks and uncertainties and it is especially important at this time that borrowers and investors alike pursue prudent risk management," he said.
William Rhodes, senior vice chairman of the IIF and of Citigroup, added: "Due to high levels of liquidity and the chasing of yield, we are seeing a lack of differentiation in the pricing of various financial assets in global markets today. The time has assuredly come when investors need to differentiate much more carefully between various types of risks, and to price risks according to fundamentals."
Ackermann said the scale of the private sector's investment in emerging markets meant it had a major role to play in crisis prevention.
The IMF estimates that annual current account surpluses could rise above $300 billion as long as crude oil prices average $60 a barrel, meaning that almost a trillion dollars of Arab petrodollars could well "seep" into the global markets. "Yet, unlike the situation in the 1970's, petrodollars will not be passively recycled via international money centre banks into Latin America," said Matein Khalid, an investment banker based in Dubai.
"Gulf petrodollars have stimulated an asset bubble in the GCC and peripheral. Arab stock markets and reinvented property finance in the GCC have led to a proliferation of new funds, merchant banks, mergers and acquisitions in blue chip listed Western companies (as DP World proves, along with all their attendant political fallout). They are increasingly deployed in Asian emerging markets such as India, Pakistan, Malaysia and China," he said.
According to financial experts, given the huge inflow of cash due to higher crude prices in the global markets, the current account surplus of the six Gulf countries will soon touch the $3 trillion mark.
"The most formidable challenge facing the GCC states is dynamic management of their reserves, which are likely to soar to an astronomical $3 trillion, larger than all of Asia, by the end of the decade. However, handling the massive wealth in a prudent way poses a big challenge," said Mohsen Fahmi, from the US-based Moore Capital Management, while addressing a conference on 'Enriching the Middle East's Economic Future' in Doha recently.
While the IIF report attempted to assess how the GCC countries had deployed their "oil windfall" in recent years, Fahmi urged GCC countries to use these reserves productively within the region and globally. "To invest this much money ($3 trillion), you have to be a leader. So, try and invest in avenues like education," Fahmi said.
Citing an International Monetary Fund (IMF) report on the region, he said with the oil income of the GCC states increasing due to higher crude prices, their spending also increases. However, before you invest in setting up centers of higher learning like a university, invest in primary and secondary education, since universities would be requiring qualified teachers and quality students, he said.
Making a comparison between the earlier oil booms in the 1970s and 80s and the current one, Koch-Weser, a former German deputy finance minister and presently vice-chairman of Deutsche Bank, said that the former did not have any lasting impact on the region since they were short-lived.
"The current boom is radically different in the sense that the GCC states are investing in crucial assets like social, financial and physical infrastructure and creating a social safety net. And a noticeable shift in investment is being witnessed and it is flowing eastwards and not westwards, as has been the case earlier."
Koch-Weser said that it is expected that over the next five years, Gulf investors will pump close to $250 billion worth of investments in Asian nations.
The IIF report noted an "extraordinary deficiency" of information on the capital flows and foreign asset holdings of the GCC's members, namely Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE. As well as traditional dollar investments, the IIF said evidence also suggested the six countries had "a strong interest in investments in emerging markets, particularly in the Middle East region and east Asia." The UAE, Saudi Arabia and Kuwait account for the bulk of the GCC's $1,550 billion of foreign asset holdings, according to the IIF. The overall holdings represented 225 per cent of the GCC's gross domestic product while China's foreign reserves represented 42 per cent of GDP. More generally, the IIF said that private capital flows to emerging markets were on track to match last year's record of more than $550 billion, a sign of a generally positive economic environment.
Josef Ackermann, chairman of the IIF's board of directors and of Deutsche Bank's management board, said there were vulnerabilities in the economic outlook.
"There are risks and uncertainties and it is especially important at this time that borrowers and investors alike pursue prudent risk management," he said.
William Rhodes, senior vice chairman of the IIF and of Citigroup, added: "Due to high levels of liquidity and the chasing of yield, we are seeing a lack of differentiation in the pricing of various financial assets in global markets today. The time has assuredly come when investors need to differentiate much more carefully between various types of risks, and to price risks according to fundamentals."
Ackermann said the scale of the private sector's investment in emerging markets meant it had a major role to play in crisis prevention.
The IMF estimates that annual current account surpluses could rise above $300 billion as long as crude oil prices average $60 a barrel, meaning that almost a trillion dollars of Arab petrodollars could well "seep" into the global markets. "Yet, unlike the situation in the 1970's, petrodollars will not be passively recycled via international money centre banks into Latin America," said Matein Khalid, an investment banker based in Dubai.
"Gulf petrodollars have stimulated an asset bubble in the GCC and peripheral. Arab stock markets and reinvented property finance in the GCC have led to a proliferation of new funds, merchant banks, mergers and acquisitions in blue chip listed Western companies (as DP World proves, along with all their attendant political fallout). They are increasingly deployed in Asian emerging markets such as India, Pakistan, Malaysia and China," he said.
Abonohu te:
Postimet (Atom)