Global and Millennium Capital of Dubai Islamic Bank to launch $500m Shari'a-Compliant Buyout Fund

The Fund will invest in buyouts of Sharia-compliant companies in parallel with the Global Buyout Fund L.P., which had its initial closing in November 2007 upon receiveing aggregate commitments of $550m and has already invested/commited over a third of it in three acquisitions.

The signing of the Memorandum was made by Maha Al Ghunaim, Chairperson and Managing Director at Global, and Khaled Kamda, Group Managing Direcor & Chief Executive Officer of Dubai Islamic Bank.

'This is a historic moment,' said Omar El-Quqa, Executive Vice President at Global, pointing to the collaboration between the regional institutions to launch a private equity fund. The MoU signatories have committed to act as primary sponsors to the Fund. 'We aim to synergize our relationships in the region with our private equity investment management skills,' he added.

Global began investing in private equity in 2000 and has invested heavily in its private equity team, which has grown in size exponentially over the last two years.

'We currently manage approximately $1.6bn in private equity and believe strongly that this asset class will dominate the region in the coming years as it is well-suited for the region's macroeconomic factors, such as sustained economic growth, implementation of reforms that facilitate foreign direct investment, and an increased willingness of governments to privatize state-owned entities in a variety of sectors,' said El-Quqa.

The Global DIB Millennium Islamic Buyout Fund will be invested as a parallel track to the Global Buyout Fund. The Global Buyout Fund, which focuses on buyouts in the MENA, Turkey and South Asia, has acquired three companies, and the portfolio is performing well and is currently valued at 1.12 times the book cost of investment. The Global Buyout Fund was also awarded the title of 'Middle East Fund of the Year' (2007) by Terrapin.

Global , one of the principal sponsors of the Fund, is appointed as the investment manager. Millennium Capital will co-manage the fund. 'In our search for an investment manager to partner with in the region, Global Investment House, with its successful private equity track record, stood out as a firm,' said Saad Zaman, Deputy CEO of Millennium Capital.

DIB, which will act as co-sponsor, is the world's first fully-fledged Islamic bank, combining the best of traditional Islamic values with modern banking technology and innovation. Since its formation in 1975, DIB has set the standards for others to follow as the trend towards Islamic banking gathers momentum in the Arab world and internationally.

Millennium Capital's activities include debt capital markets, asset management, M&A advisory, and Private Equity. Its Advisory business provides corporate and government clients with access to a complete array of financial advisory and capital raising solutions via experienced and specialized professionals.

The Global DIB Millennium Islamic Buyout Fund will focus on investing in Islamic companies in MENA, Turkey and South Asia. 'The Fund is well suited for sophisticated investors from the region who have a strong preference for Islamic products but do not come by private equity products very often,' said Omar Masrur, Head of Private Equity of Millennium Capital, the investment banking arm of DIB.

The Fund will generate returns by investing in a diversified portfolio of companies across a broad range of sectors and countries that are characterized by high growth potential driven by highly attractive and sustainable macroeconomic factors, such as increasing per capita income, favorable demographics and consolidation opportunities.

It will focus primarily on companies located in the GCC, Turkey, Egypt, Jordan, Lebanon, Tunisia and Morocco, although it may also invest opportunistically in companies located in China, India and Pakistan so as to capitalize on existing or potential synergies with companies and/or markets within the MENA region.

The Sharia Board for the Fund will be headed by Dr. Hussain Hamed Hassan, Chairman of the Sharia Board of Dubai Islamic Bank.

The sponsors are currently preparing the offering document for regulatory approval of the Central Bank of Bahrain.