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Al-Tawfeek has been successfully investing in private equity in MENA for more than a decade. Al-Tawfeek is confident of sourcing potential opportunities through strong deal flow, hence will be seeding the Fund with US$ 20 million.
The Fund was approved by the Bahrain Monetary Agency on 14 February 2006. The Fund is established for a period of 5 years commencing from the Closing Date with a target capital of US$ 100 million.
Detailing the strategy behind the launch of the Fund, Mr. Hassan Salim AlAmmari, CEO of Al-Tawfeek said,
"The private equity industry in MENA has witnessed tremendous growth over the last two years. In the past the exit strategy for MENA private equity investments has primarily been trade sales. With changes in the laws and regulations and the launch of regulatory authorities, financial exchanges and financial centers, such as the Capital Market Authority in Saudi Arabia, the Dubai International Financial Exchange and the Qatar Financial Centre, IPOs are becoming a more convenient route for exits. The change in the regional investment infrastructure has supported the MENA private equity industry to leap into the next stage of its development and growth. It has encouraged family offices to divest their private businesses through IPOs. MENA private equity as an asset class is still in the early stages and is expected to continue to attract an increasing share of investment capital and outperform other asset classes in the years to come."
Elaborating on the MENA focus of the Fund, Mr. AlAmmari added: "the region has experienced exceptional growth in recent years. For 2003 and 2004, the economic growth averaged more than 5.6% a year, the strongest growth in a decade, driven largely by increasing oil revenues and ongoing economic reform. Besides oil, the region has substantial gas reserves and the production of gas is projected to grow more rapidly than oil. The outlook for the MENA region is upbeat; the oil and gas reserves of the region are critical to meeting the world's growing appetite for energy. MENA countries are expected to spend US$ 1 trillion on the oil and gas sector between 2006 and 2030. The projected oil and gas export revenues together with the expenditure from the governments and the private sector will support the regions economic development."
Posted by Anne-Birte Stensgaard, Senior News Editor
