ADIH launches $300m Hospitality Development Fund

Fund advisors include Middle East-based Gulf Finance House and Ithmaar Bank. Minimum projected IRR for the fund is 20%.

Mr Rashad Y Janahi, Managing Director, ADIH, said:

"HDF will cater to investors who are looking to diversify their investment portfolio by adding Sharia'a-compliant hospitality-related products to their current basket of investments. Given the potential within the Menasa hospitality sector and ADIH's expertise, we are confident to raise target capital within the target subscription period. The fund will invest in several hospitality sub-sectors including airlines, tourism, accommodation, food services and leisure."

"The fund will also include investments in new development projects in addition to the existing hospitality and entertainment companies that has a potential for growth. The fund will be managed by relevant teams with international expertise to ensure objectives are achieved. Several opportunities have already been identified after thorough due diligence and feasibility studies conducted to identify risk -return characteristics," he added.

Global economic growth in the recent years prior to the economic crisis in mid 2008, particularly in the Gulf region, has brought about considerable economic activity and investments in many new emerging markets.

This increased economic activity coupled with the globalization of business and the cross-border movements of services, products and capital have facilitated movement among societies, which is clearly evidenced by the increase in travel, for both business and leisure.

This has been particularly true in the Middle East, which has witnessed the strongest growth mainly due to high oil prices.

Not only has GDP growth in 2007 and 2008 been amongst the highest in this region, the GDP growth projections also remain strong with 1.5% in 2009 and 2.8% predicted for 2010.

Furthermore, the United Nations World Tourism Organization has also determined that the countries in the Menasa region have observed some of the fastest growth in the tourism industry.

The fund willl be place by ADIH Investment Placement Team which has a strong client base and expertise in the field.