GCC attractive climate for international investors, says Ithmar founder

Belhoul was addressing Capital Creation 2005 - the fifth annual international private equity and venture capital conference in Monte Carlo, which is ranked as one of the world's most influential private equity gatherings. He was the sole private equity speaker from the Arabian Gulf to address the conference.

Outlining the current investment opportunities in the Gulf, Belhoul told delegates that recent positive regional trends include private sector growth and development, the introduction of market liberalisation initiatives, increasing moves towards key sector privatisation and ongoing improvements in regulatory frameworks.

"All this has meant that the GCC markets have witnessed triple digit capital market growth in the past two years," said Belhoul. "With such phenomenal growth levels, international players will be looking to tap into regional markets.

Belhoul went on to present the case for private equity investment within the GCC.

"It is now a high growth regional industry but a fragmented market with limited players. The GCC countries now offer the opportunity of high potential returns."

Belhoul said opportunities within the GCC lay in four key areas - family businesses, international companies, privatisation projects and expatriate-owned businesses. However he stressed that Ithmar Capital focuses on the highest potential areas of family businesses and international companies.

He told delegates that private equity opportunities among GCC family businesses include the management of succession issues, the need to consolidate and refocus businesses and meet demand for strategic pre-IPO partnerships. Against this background, he said, private equity could deliver a corporate governance framework, generate rigorous value creation and enable exit opportunities.

International players, meanwhile, are looking to private equity to provide a sophisticated institutional partner, to orchestrate exit options and provide strong regional connectivity to expand in high growth markets, acquire regional assets or simply relocate to the GCC.

"Family businesses need 'smart capital' not only for growth but even for survival," said Belhoul. "While international businesses need 'smart capital' to act as a catalyst for high growth."

Ithmar Capital, which is focused on expansion capital and buy-outs of businesses in attractive sectors which have a GCC focus, recently announced the successful first closing of its Ithmar Fund II (targeted at US $150 million), having received commitments in excess of US $60 million. The company also manages a US $70 million fund that is fully invested.