SHUAA Partners announces the successful first closing of the $200m 'SHUAA Hospitality Fund I'

As of 30 June 2008, the Fund has received interest in excess of $240m and over $165m in aggregate capital commitments, and hence anticipates the remaining $35m will be fully subscribed before second and final closing.

The SHUAA Hospitality Fund I is the third private equity fund sponsored by SHUAA Capital psc. SHUAA Partners manages the $200m SHUAA Partners Fund I which has made five investments within the GCC and exited two, achieving an average of 51% gross IRR.

SHUAA Partners also manages the $100m Frontier Opportunities Fund I which has completed its first investment and is dedicated to diversified investments in Lebanon, Syria and Jordan.

SHUAA Hospitality Fund I offers a diversified exposure to the hospitality sector in the Middle East and North Africa, with a primary focus on the GCC, the Levant and Egypt.

It will invest into the development of a diversified portfolio of 5 and 4 star hotels, resorts, serviced apartments and budget business hotel properties which will be managed by Rotana Hotel Management Corporation.

SR200m ($53m) will be allocated to the Shari'a-compliant SHUAA Saudi Hospitality Fund I, aiming to develop 17 hotels with 5,000 rooms in the Kingdom of Saudi Arabia ranging from 5 stars to budget hotels.

SHUAA Hospitality Fund I has also signed a joint-venture with Orascom Hotels Holdings to initially develop 5 Centro budget business hotels in Egypt, the joint venture has an initial capital of $40m of which the Fund contributes $20m.

The remaining balance of the SHUAA Hospitality Fund I will invest in select hospitality opportunities across the MENA markets, in which SHUAA Partners and Rotana have already begun to identify potential investments.

"In addition to the $165m in signed commitments, the soft commitments we have received, for our regional SHUAA Hospitality Fund, should mean we easily reach our stated $200m target. Investor appetite has been strong given the opportunity to benefit from the booming tourism and travel industries in the region, investing in a diversified portfolio instead of taking exposure on single-country or stand alone property, and securing an identifiable exit. With the advent of the summer season, we opted however to close and allow institutional investors to take the time needed for their internal process" said Mr. Iyad Duwaji, Chairman of SHUAA Partners.

Mr. Marwan Firzli, Fund Manager of the SHUAA Hospitality Fund I, said: "The Middle-East and North Africa is the fastest growing region in the world for the travel industry. Today, on the heels of the UAE's leading role, most countries in the MENA have realized the size of the opportunity that the leisure travel represents as a major source of economic growth, and job creation. Across the region modern hotels are full and when offered a choice, customers are choosing to stay at new, modern hotels versus aging properties. Many cities in the region are adding new airport terminals and GCC airlines are building capacity on an unprecedented scale to support the strong growth in travel to and within the MENA. A large proportion of these additional travellers will require sensible and affordable accommodation, and this new fund plays to this theme".