Global launches the first Pre-IPO fund in the region

Mr. Omar M. El-Quqa, Executive Vice President, mentioned that the Fund's investment objective is to achieve superior returns by investing in equity and equity related IPO and Pre-IPO securities, where the eventual exit strategy will be through listing on the local stock exchanges among GCC states / trade sale.

The GCC capital markets have come a long way in the last couple of years with their role of resource mobilization and overall economic development in the region. Liquidity in the markets has improved and market capitalization of the GCC market, which was around US$120bn in 2000, has catapulted to reach US$900bn in 2005. The aggregate volume of shares traded on the GCC exchanges rose from 7.9bn shares in the year 2000 to a mammoth 50.9bn shares in 2004. The strong growth in the capital markets in the last couple of years is the result of liquidity and the fundamental and structural changes in the economies which drove GCC stock markets further.

The capital markets are an important engine for growth in developing economies and the improved capital market conditions in the region have boosted the size of private wealth invested in the regional equity markets. The increased activities in the stock markets have resulted in established companies seeking to raise equity capital from the market. The first five months of FY 2005 have seen over 12 IPO's (initial public offering) raising in excess of US$1.5bn. The investor response to these issues have been in excess of US$150bn clearly indicating a demand for IPO's in the market.

Mr. El-Quqa added that the coming years, with the proposed privatization initiatives by the respective Governments in the GCC countries coupled with leading regional corporations eyeing listing opportunities in the regional equity markets, there is likely to be significant opportunities in the Pre-IPO market. There are already IPO's in excess of US$9bn that have been announced by leading companies / institutions in the region which offers a potentially large market for the fund to invest in.

It is worth mentioning that the minimum investment in the fund is USD 500,000 for a period of five years with the possibility to redeem up to 50% of the initial investment amount after two years. The benefits of investing in the fund are the vast experience of the fund manage, Global, who will conduct professional research, valuation and evaluation of management and determine the purchase price and the selling price of the shares acquired. In addition to the diversification of risk, and most important selling the companies at the right time for the right price to ensure excellent return.

Mr. El-Quqa expected a very high demand on the fund as we have seen a lot of interests from our clients during the preparation stages. Furthermore, there are negotiations with leading financial companies in the GCC to act as placement managers for the fund in their courtiers.