The fund is being managed by Abraaj Capital and co-sponsored by Deutsche Bank and Ithmaar Bank. The IGCF will be one of the largest funds ever raised in the region.
The fund will have a target IRR (internal rate of return) of 20% p.a. and have a life of ten years. The predominant focus of the fund will be to take majority/minority stakes in greenfield projects, growth capital investment opportunities and to participate in large-scale privatisations and buyouts.
The key targeted sectors for the fund will be: Power and Utilities, Water, Healthcare, Education, Transportation and Ports, Oil and Gas, Petrochemicals, Industrials and Mining. The investment opportunities in these sectors exceed well over US$630 billion, according to an Abraaj Capital research report that was also unveiled today.
Among the other key findings in "The Infrastructure Investment Requirements of the MENASA Region" is that over 200 privatisations have been announced in the MENASA region across a variety of sectors and that the privatisation pipeline is expected to reach US$1 trillion during the next decade.
Commenting on the announcement, Mustafa Abdel-Wadood, Managing Director of Abraaj Capital, said: "The initial response from investors to this fund has been extremely strong. In partnership with two outstanding institutions, we are delivering an unparalleled opportunity for investors to participate in the economic growth of the region. Based on the response to date, it is clear that our confidence in this offering is widely shared."
Tom Speechley, Executive Director of Abraaj, added: "Shari'a-compliant finance is the fastest growing area in the global financial industry, and Private Equity the fastest growing asset class in the Middle East. This fund has bridged the two together, and combined them with the vast opportunities in regional infrastructure development."
Sheikh Salman Al-Khalifa, Managing Director of Ithmaar Bank, said: "Our experience in Islamic Finance will complement the global strength and intellectual capital of Deutsche Bank and the proven track record of Abraaj Capital to create the perfect partnership. We are convinced that the skills that each partner brings to the joint venture will make this fund a great success."
He added: "Ithmaar itself and through its interests internationally has enormous experience in the field of Shari'a-compliant projects and is recognised as a global leader in this field. It was a co-sponsor and co-manager of the IDB-DMI Infrastructure Fund, the first of its kind in the region. We believe that bringing this asset class to Shari'a-compliant investors is a major step forward in the world of Islamic finance products."
Ricardo Honegger, Managing Director, Global Markets, Middle East and North Africa, Deutsche Bank, said: "As one of the world's largest financial institutions, Deutsche Bank has identified this region as important to its continued growth. The coming together of critical and complementary skills in this 'Infrastructure and Growth Capital Fund' provides investors a unique opportunity to participate in the ongoing economic growth and long-term development of this region."
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Abraaj Capital USD2 billion fund targets vast infrastructure investment opportunities
- United Arab Emirates: Wednesday, December 20 - 2006 at 15:59
- PRESS RELEASE
Abraaj Capital, the premier investment firm specialising in private equity investment in the Middle East, North Africa and South Asia (MENASA) region, announced today that it was targeting US$630 billion in regional infrastructure investment opportunities through its US$2 billion Shari'a-compliant Infrastructure and Growth Capital Fund (IGCF).
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Among the key findings in "The Infrastructure Investment Requirements of the MENASA Region":• More than US$630 in regional infrastructure investment required over the next decade, including
• US$188 billion for Transportation and Ports.
• US$155 billion for Power & Utilities
• US$130 billion for Water
• US$87 billion for Petrochemicals
• US$49 billion for Healthcare
• US$ 18 billion for Education
About Abraaj Capital: Abraaj Capital is the premier investment firm specializing in private equity investment in the Middle East, North Africa and South Asia (MENASA) region. The management team has brought together some of the most compelling and successful transactions in the history of leveraged acquisitions across the region.
With over US$2 billion of assets currently under management, Abraaj has pioneered institutionalizing private equity practice in the region and is setting trends and benchmarks for others to follow. Funds currently being marketed (in the fund raising phase) will bring an additional US$2 billion under management.
Winner of industry awards including 'Middle East Private Equity Firm of the Year' from Private Equity International and the Banker Middle East Award for 'Best Private Equities Institution' in 2006, Abraaj is also the first pure private equity firm to be registered by DFSA to operate out of Dubai International Financial Centre (DIFC).
In 2006, Abraaj launched a US$300 million joint venture with Sabre Capital focused on private equity in India and the US$ 300 million Abraaj BMA Pakistan Buyout Fund. Most recently Abraaj launched the US$ 2 billion Infrastructure and Growth Capital Fund. In September 2006, Abraaj became the single largest shareholder in leading investment bank, EFG-Hermes, by way of a capital increase bringing Abraaj's issued share capital to US$1 billion.
About Deutsche Bank: Deutsche Bank is a leading global investment bank with a strong and profitable private clients franchise. A leader in Germany and Europe, the bank is continuously growing in North America, Asia and key emerging markets. With Euro 1,035 billion in assets and 64,103 employees, Deutsche Bank offers unparalleled financial services in 73 countries throughout the world. The bank competes to be the leading global provider of financial solutions for demanding clients creating exceptional value for its shareholders and people.
About Ithmaar Bank B.S.C.: Ithmaar Bank, with a paid-up capital of US$360 million, is a full service investment bank with operations spanning the Middle East and North Africa
(MENA) region, as well as Asia and Europe. The Bank's business includes underwriting (equity and debt), private equity (structuring, participation and portfolio management), project financing, asset management and advisory business (capital market, merger & acquisitions and project advisory).
Ithmaar Bank's flagship companies include Bahrain-based Shamil Bank, a listed full service Islamic commercial bank; Solidarity, an Islamic insurance company based in Bahrain; First Leasing Bank, a wholesale lease finance company; Switzerland-based Faisal Private Bank and Pakistan-based Faysal Bank Limited (Pakistan).
For further information, please contact:
Nicholas Nesson/Bakul Gala
ASDA'A Public Relations
Exclusive Affiliate of Edelman, Middle East & North Africa
Dubai, UAE
Tel: 971-50-4785324 / 50-2459547
Fax: 971-4-3356080
Posted by Anne-Birte Stensgaard, Senior News EditorWednesday, December 20 - 2006 at 15:59 UAE local time (GMT+4)
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