Abraaj closes new USD100 million Special Opportunities Fund with significant oversubscription

The announcement of the closure comes on the back of the liquidation of the Abraaj Special Opportunities Fund I (ASOF I) on 30th June, 2005. The ASOF 1, capitalised at $32.6 million realised a return of 98 per cent on average capital invested (an Internal Rate of Return (IRR) of 59 per cent) on their investment over an eighteen months holding period.

ASOF II will follow the investment strategy of its predecessor ASOF I. The new Fund will also focus on Initial Public Offerings (IPO) and pre-IPO opportunities and take "strong minority" positions in quoted companies in the GCC, Levant and South Asia.

Arif Naqvi, chief executive and vice chairman of Abraaj Capital, said that ASOF II is well positioned to take advantage of the region's booming economies and capital markets.

"Once again we have secured the support of strong regional financial institutions and our high net-worth partners as investors in the Fund. This also is the result of Abraaj's performance with all its funds delivering an IRR of over 50 per cent. Like our previous funds, ASOF II also had a significant oversubscription, but we decided to close it at $100 million, which fits into our strategy of fund size in this asset class," Naqvi added.

Shirish Saraf, executive director of Abraaj Capital, said that the ASOF II has already secured founder block allocations in a number of "blue chip" and IPOs that are slated to enter the market in the last quarter of 2005.

"We follow a clear and structured investment process through deal sourcing, extensive due diligence, initial purchase, gradual building of strategic block to reach a targeted investment size and concluded with a successful exit strategy. We source deals through extensive relationships, within the region and through our knowledge of the corporate developments in the region" he added.

ASOF II has an investment horizon of two to three years and a target IRR of 30 per cent. The minimum investment in the Fund was $1 million. The Fund has called down a 50 per cent drawdown on the closing date.