Complex Made Simple

Qatar Development Bank launches “Istithmar” and the “SME Equity Fund”

QAR 365 million investment initiative to play significant role in developing private sector business opportunities for Qataris

Qatar Development Bank (QDB) announced today a new line of direct (equity) investment offering designed to support Qatari SMEs “Istithmar”.

In addition to that, QDB launched the “SME Equity Fund,” the first product under the new offering. The “SME Equity Fund” is a landmark new initiative that is a first of its kind in the State of Qatar. Worth 365 million Qatari riyals, the fund is designed to provide valuable investment to innovative start-up companies and Small & Medium Enterprises (“SMEs”).

In addition to the SME Equity Fund, QDB announced “Istithmar”, a new line of direct investment (equity) products and initiatives in the bank. The announcements were made at a press conference on Sunday, September 13, 2015 at Qatar Development Bank headquarters.

The aim of the “SME Equity Fund” is to provide the capital needed for Qatari entrepreneurs or Startup owners to realize their business vision and aspirations. The SME Equity Fund initiative is designed to encourage new and innovative projects that will contribute to the country’s economic diversification, generating value neutral returns that can be re-invested in subsequent funds to help and support the economy. The fund will assist in building capabilities and help accelerate the development of Qatari SMEs to world class standards.

Mr. Abdulaziz Bin Nasser Al Khalifa, CEO of Qatar Development Bank, said: “At QDB we aim to support a successful transition towards the country’s overall economic diversification. This initiative is an unprecedented milestone for entrepreneurs to receive equity investments and is in line with the bank’s long term support offerings designed to drive forward existing Qatari entrepreneurs and SMEs potential for success and growth. To this end, we have developed the investment offering (“Istithmar”) to complement QDB’s overall strategy and to offer a new line of services to support entrepreneurs and SMEs to reach their goals.

The first product under “Istithmar” is the SME Equity Fund, which provides direct (equity) investments from QDB to Qatari entrepreneurs in order to provide financial and non-financial support. In order to reach this goal, we have developed a complete operating framework for this unique fund and we urge Qatari entrepreneurs to benefit from this offering that surpasses mere financial support to provide an overall environment that aid, guide and ensure the success of these projects.”

Mr. Mohammed Al-Khater, Executive Director of Investment at Qatar Development Bank, emphasized on the importance of this fund to provide a new type of support to entrepreneurs and SMEs. Al-Khater further explained that what makes the “SME Equity Fund” initiative unique, is its ability to provide direct investments in equity which are typically reserved for higher risk businesses with high growth potential. Investors in this type of initiative take up an equity stake in the business with the objective of selling the stake in the future at a profit once the business has experienced growth and expansion. In addition to financial support, equity investors are more actively involved in the business, and have a seat on the board for example, in order to support and guide the entrepreneur in growing their business.

Al-Khater continues: “the “SME Equity Fund” initiative, is the first of its kind and also the largest in Qatar. Qatar Development Bank seeks to support SMEs in Qatar by providing financial and non-financial support in a new and unique way To facilitate access to finance and support entrepreneurs, the bank tailored this initiative to cover three core phases; pre-investment, investment execution and post-investment.”

The life term of the SME Equity fund reaches up to 10 years, five years for deployment and 3-5 years holding period.

Qatar Development Bank seeks to provide all the support tools necessary to catalyze and speed up the development of the Qatari private sector and contribute to the economic diversification in order to help build a sustainable competitive economy.