Investcorp to raise new Gulf Opportunity Fund

Through its first fund, Investcorp Gulf Opportunity Fund I, this new business will make investments in greenfield "build" projects, as well as making buyout and growth capital investments. The fund will source and create unique investment opportunities with the aim of bridging the needs of the region with businesses, technologies and know-how from around the world.

Investcorp will draw on its 25 years of private equity investment expertise and unrivalled pan GCC network of relationships to provide attractive opportunities for investors. It is anticipated that the fund size will be at least $500m, and, as in its other lines of business, Investcorp will co-invest alongside its clients, thus ensuring a strong common interest with its clients. Fundraising across the GCC and beyond is expected to begin in the early part of 2007.

The timing of this initiative exploits the current favourable economic outlook for the region as well as a maturing investment climate. Governments are channeling a large proportion of their oil surpluses to long-term development of their economies in order to create jobs for their fast growing populations, diversify their economies, and generate more value from their hydrocarbon resources. The private sector is also very active in response to government efforts to create a more attractive investment climate. This has led to enormous investment opportunities and strong deal flow. In addition, it is now both feasible and attractive to deploy private equity in this region as a result of the availability of acquisition financing, the ability to exercise control and influence to add value to investments and the growth in exit options.

Nemir A. Kirdar, Investcorp's President and Chief Executive Officer said: "The momentum in the Gulf economy and economic liberalisation is bringing us close to the tipping point for much broader and higher quality opportunities for private sector investment. Our in-depth knowledge of the region, global private equity investment experience and fund raising capability in the Gulf will make our Gulf Opportunity Fund a uniquely compelling prospect for institutional and ultra high net worth investors.

"It's no secret that many of our investors across the Gulf have been urging us to bring our skills to bear on private equity investing in the region. We saw the opportunity, but with Investcorp's brand and reputation, expectations are always high, and we needed to make sure we approached this market in exactly the right way. We've completed extensive market research, and we are convinced that the Gulf private equity market has now reached the right 'tipping point' where we can make a real difference for our investors and help move Gulf private equity onto another level.

"We'll be bringing our strong due diligence analysis and post investment management support to bear, as well as our rigorous investment evaluation process, and leading risk management practices. We'll also have access to the expertise of our current and former portfolio companies in North America and Western Europe. We're in the process of making a number of hires for the new fund, as well as utilising Investcorp experts from our placement area and our private equity teams in London and New York.

"As in our global investing, we'll be highly selective, but the case to invest in the GCC is compelling and we can see some excellent opportunities over the coming few years that will make the deployment of private equity capital attractive".