Delta Capital launches US$75 million fund targeting the Middle East telecom market

The US$46 billion telecommunications industry in the Middle East is one of the fastest growing in the world with compounded annual revenue growth of approximately 11% p.a. Population growth in the region, increasing levels of market liberalization and competition in both fixed and mobile telecom are driving this growth and create the optimal environment for Delta Capital's fund.

The Delta Capital MENA Telecom Fund is specifically designed to provide investors with access to two growth opportunities in this industry that cannot be accessed through publicly listed companies. The primary focus is the growth expected within the newly emerging class of niche players along the telecom value chain that provide services to the telecom operators. A secondary focus will be on participation in specific license classes throughout the region.

Delta Capital B.S.C. (c) is part of the same group as Delta Partners, the leading telecom advisory firm in the MENA region. Delta Capital will utilize Delta Partners' industry experience and expertise to extract above average returns from its investments through close collaboration with its portfolio companies.

"At Delta Capital, we are nurturing the growth potential of the telecom industry in this region. Our specific industry and investment expertise and close ties with Delta Partners puts us in pole position to capitalize on business opportunities related to the liberalization process, new business models and technologies," explains Morten Kvammen, Head of Private Equity Delta Capital.

"In addition, this fund will provide investors the ability to participate in pre-IPO value gains in an industry where they have had previous access only through public markets."

Key figures and information about the telecom sector in the Middle East from Delta Capital B.S.C:

The $75 million fund will target an annual rate of return of 25 percent and focuses on taking minority or majority stakes anywhere between $3 million and $15 million per investment. Although it targets investments in the entire MENA region, specific focus will be on the UAE, Bahrain, Jordan, Kuwait, Saudi Arabia and Egypt.

• Increasing levels of liberalisation and competition are driving the creation of opportunities across the value chain.

• In 2006, the revenue growth in the telecommunications industry across the Middle East was approximately US$46 billion.

• Advances in regulation, technology and business models are expected to open up further opportunities within telecom and related industries.

• The estimated annual revenue growth rate in the Middle East is expected to double in digits for the next three year period.