Gulf Capital to launch $550m GCC Equity Fund

Gulf Capital, the Abu Dhabi-based private equity firm, has announced its plan to launch a $550m fund to invest across the Middle East and North Africa.

The GCC Equity Partner III Fund will primarily focus on investment opportunities in the UAE and Saudi Arabia.

Karim El Solh, chief executive officer of Gulf Capital, said: “We’re very focused on the Gulf, mainly UAE and Saudi, and sometimes spillover to Egypt and Jordan.”

Gulf Capital currently manages assets worth in excess of $2.5bn. The firm’s private equity strategy is to “acquire strategic stakes in highly profitable and fast growing companies in select industries in the Gulf region.”

Speaking to reporters, El Solh said that the seed capital for the fund will be $100m, while the full amount of the fund is expected to be raised by the end of 2014.

Gulf Capital has not yet invested approximately 30% of a previous $533m fund and expects to close two more deals this year, according to El Solh.

Back in September, Gulf Capital announced that it had hired the independent financial advisory group, Rothschild, to advise it on a share listing for its largest asset, oil and gas services firm Gulf Marine Services, on an overseas stock exchange in early 2014.

Gulf Capital is a leading alternative asset management company, set up in 2006, to take advantage of private equity opportunities in the Gulf Cooperation Council (GCC) region.

Financial advisory group, Rothschild, employs 3000 people across 42 countries and provides strategic, M&A, wealth management and fundraising advice and services to governments, companies and individuals across the globe.

Beyond The Crisis: Private equity in North Africa

North Africa has been wracked by political turmoil since early 2011, but private equity firms are looking beyond the problems and continuing to find opportunities in the region

By Anna Lyudvig

Following the Arab Spring and continued political instability, several North African countries are facing difficult economic situations in the short term, with growth rates especially diminished in the countries that experienced regime change. However, private equity (PE) investors buying into the region, who need to take at least a medium-term economic view and focus on the fundamentals of a business, are still finding grounds for optimism.

Proponents argue that the case for the region is clear. North Africa accounts for around one third of the continent’s total GDP and is home to over 17% of its population. Moreover, the region has long-held trade and investment connections with Europe and the Middle East, and as the world’s developed economies are emerging from the global financial crisis, North Africa’s governments are poised to capitalize on these relationships to the benefit of their economies.

“You have a strong underlying macroeconomic environment, supporting the investment, whether it is attractive demographics or high per capita income,” according to Ahmed Badreldin, senior partner and head of MENA for the Abraaj Group, a leading investor in growth markets, which manages $ 7.5bn in assets.

Over the last decade, strong growth, an expanding middle class, and a global trend that is seeing more investors seeking growth from a broader and more varied range of markets is driving an increased international investor interest in the region, says Nayel Georges Vidal, director, Tunis at Emerging Capital Partners (ECP), a pan-African private equity firm that has raised over $2bn for investment across the African continent, including North Africa.

“An emerging market fund of funds would once not have looked at Africa to invest; now they are thinking that 10-15% of their capital should be there. Investors continue to show strong interest in Morocco and Algeria,” says Vidal. “While they are cautious on Egypt and Libya in the short term, there is potential for good growth after political stabilization.”

Vikas Papriwal, UAE head, SWF and PE practice at KPMG, agrees, saying that once the effects of the Arab Spring fade, one can expect to see investment returning. “If you look at the more macro trends, there is around $145bn of dry powder in the system globally, which needs to be invested soon. In Africa, there is a massive need for capital and the region has high growth potential; in North Africa, we are seeing funds being raised in various sectors including infrastructure and telecoms,” he says.

Investment focus

The Abraaj Group believes that the story of investing in North Africa still holds. In July, it completed its first exit in Tunisia, making a “significant return” despite the political backdrop.

“If you look at empirical evidence, you will find that the companies we have invested in or have looked at in the past are still growing at 15-20% every year despite the Arab Spring,” says Badreldin.

Abraaj is currently raising capital for its second mid-market fund for North Africa, investing in Egypt, Tunisia, Algeria and Morocco, focusing on mid-market strategy with a target size of around $15-30m. The group has local offices in the above countries, which is very important to source these transactions. “You cannot do North Africa using a suitcase banker approach,” stresses Badreldin.

Given the negative investment sentiment towards Egypt, it may come as a surprise that CedarBridge Partners, a $65m private equity firm with a mandate covering geographically the whole Mena region, has a particular focus on the country. The company invests in small and medium enterprises mainly in healthcare, education and retail, and has one current active investment in CIRA, one of the largest educational groups in Egypt.

“We have been investing or looking for opportunities despite the political turbulence. Our schooling business has been growing year-on-year, and it is rewarding,” says Imad Ghandour, managing director at CedarBridge Partners.

Ghandour says that while investment sentiment has been up and down over the past 2.5 years, it is now a case of “wait and see” until things have settled down politically.

“Our general view of Egypt is that it is a stable market despite political turbulence and it is a big market, which you cannot ignore. We have been investing in Egypt over the past five years from various funds and it has been generally rewarding. At the micro level the businesses continue to do well even if the macro picture does not look that rosy,” he says.

The two other countries the firm is considering are Tunisia and Morocco, while Algeria and Libya cannot yet be considered for regulatory or political reasons, according to Ghandour.

PE firms are currently concentrating their attention on sectors which are defensive and have growth potential, whether they are export focus or consumer-driven. Infrastructure, hospitality, financial services and agriculture are a few common investment themes.

ECP, which looks at deals in the region of $40m to $120m, invests in companies that operate in business environments characterized by limited competition or in sectors where Africa has either a comparative advantage or an unmet need.

“This strategy maintains diversification within ECP’s investment portfolio and provides our investors with greater, risk-adjusted returns that are generally uncorrelated to the US and other global markets,” says Vidal.

In North Africa, ECP Fund I (which is fully exited) invested in and helped grow four major infrastructure companies, whereas ECP’s Fund II (that closed at $523m in December 2005), is currently in the post-commitment phase. It has two portfolio companies based in North Africa: Générale Assurance, one of Algeria’s largest private insurance companies and Société d’Articles Hygiéniques (SAH), Tunisia’s leading producer of absorbent hygiene products.

Meanwhile, country-specific funds also play a role, such as the Moroccan Infrastructure Fund (MIF), which was established in December 2006 with MAD800m ($95.67m) of commitments to capitalize on the demands for infrastructure needed during Morocco’s growth spurt. The fund is a joint venture between ECP and Attijari Invest, the private equity arm of Attijariwafa Bank, Morocco’s largest bank. MIF targeted numerous sectors including telecoms, transportation, energy, power and water, and ports.

According to Vidal, MIF holds minority positions through equity investments that typically range in size from MAD50m to MAD150m ($6m-$18m). “MIF recently exited its entire position in Osead Maroc Mining, the full exit representing 8.4x MIF’s initial funded investment and an internal rate of return of 94%,” he says.

More rewarding than the GCC?

In the context of the wider MENA region, the North African private equity industry is in a nascent state, but many experts believe it is more fertile ground for such investment than the GCC, in terms of market access and revenue potential.

“I think North Africa is one of the most promising sub-regions where capital is well appreciated and rewarded as opposed to the Gulf region where there is an abundance of capital,” says Ghandour. “You can find good deals, not as many as you would like, but better than what you will probably find in Saudi Arabia.”

Badreldin agrees. “In North Africa you can invest in companies with attractive valuations and get higher returns. In the GCC you can get the same company and pay 30-40% more in terms of the valuation.”

For pan-emerging market players such as Abraaj, the competitive field in North Africa is relatively clear, he adds.

“There is not too much competition in private equity, because the market is very young and there is enough opportunity for everybody,” continues Badreldin.

For KPMG’s Papriwal, from a private equity point of view it is very hard to find a lot of businesses of scale to invest into, while the other big issue is exit, because the local markets are fairly illiquid or small.

“I think because there are not that many fund managers on the ground, which have credible track record, it is also hard to do fund-of-fund type investment. I think you need to be on the ground clearly to meet management and companies,” he says.

Despite the deepening of the African PE industry, there are still significant barriers to entry, agrees ECP’s Vidal. “As a GP, you need to demonstrate significant investment experience. In particular, it is important that you have experienced multiple investment cycles and know how to execute across turbulent markets. This is critical for developing exit strategies and ultimately achieving above-market returns,” he stresses.

However, for experienced investors, challenges can also present opportunities, he says, adding that Africa has a perceived risk that is higher than its actual risk, resulting in limited competition and attractive valuations for investors.


One challenge to the reputation of private equity investment in North Africa lies in overcoming investors’ misconceptions of the effect of political instability in the region. The risk/return reward trade-off for investment can be significant if correctly managed by experienced professionals.

“During politically volatile times, private equity investors can benefit from providing essential long-term growth equity to entrepreneurs or leading businesses while temporary liquidity constraints are impacting their ability to access other sources of financing. In fact a number of prohibitive investment regulations have been lifted by the new governments in the region, allowing for easier access by foreign investors,” says Vidal.

One way in which ECP mitigates political risk is by investing in companies with pan-African operations. During times of conflict, the asset manager reports regularly to its LPs, and maintains support of its investee companies.

Vidal points out that the effects of political uprisings can be short-lived, citing the case of the firm’s investment in Tunisian SAH. While operations closed for two weeks in January 2011, business picked back up quickly and domestic sales, which were down by 40% in January 2011, had recovered in March and surpassed their 2010 level by April. Since then, SAH pursued with strong double digit growth in revenues and achieved more than 30% growth in revenues in 2012 compared to 2011. Since the Fund’s investment in 2008, the company has more than doubled its revenues and EBITDA.

For players like CedarBridge Partners and the Abraaj Group, political risk is not that high on the agenda. Ghandour points to country-specific risks such as the currency depreciation in Egypt, whereas for Abraaj’s Badreldin, the key challenge is around security. “We can always price in the political risk, but it is very hard to price in the security risk. The elections or impeachment of President, you can always price it in, because the technocrats are largely the same and you know which way the ball will fall.”

“The problem is when the country enters a security situation - what is happening now in Cairo. This results in curfew, which impacts businesses, people’s ability to get to work, so you can have a negative spiral effect,” he concludes.

GPs positive on Mena private equity potential

The global fundraising environment continues to be seen as tough by general partners (GPs), but there appear to be signs of growing optimism, according to the Grant Thornton 2013 Global Private Equity Report.

Martin Goddard, global services line leader (transactions) at Grant Thornton International, said that there are indicators from within the industry “signifying that there is a level of confidence returning that has been absent for a number of years”.

The report, based on 156 interviews with PE firms in seven principal regions including MENA, found that the percentage of respondents stating the environment as positive is up in many of the regions, with MENA being up from 13% to 47% compared to last year’s results.

Moreover, GPs in the MENA region are currently the most positive about the environment for their portfolio, despite the still uncertain post-Arab Spring legacy in this region.

And although deal flow remains a key challenge, 73% of GPs in MENA expect investment activity to rise over the next 12 months.

Respondents were also positive about Africa as a whole. While the continent remains a large and difficult region to access, increasingly PE firms are recognising that there is potential in the markets of East and West Africa and not just in the more established South Africa and MENA markets, the study suggested.

“Africa is up and coming as is the Middle East on a case-by-case basis,” said one respondent from Turkey.

According to one respondent from Kenya, many think raising a new fund in Africa is relatively easy, but investors are scrutinising new funds closely.

“The fundamentals of a track record, experience and local presence are vital, perhaps even more so in such a new PE market,” he said.

According to Grant Thornton’s report, consumer-focused sectors are still expected to dominate the emerging markets.

Beyond these sectors, whereas a year ago GPs were expecting financial services activity to be significant, this year TMT and energy are regarded as more promising with real estate and infrastructure noted as features for the Middle East & Africa.

Finally, the MENA region is cited as amongst the most important sources of capital geographically for PE firms seeking new capital, according to report findings.

Gulf Opportunity Fund acquires 30% stake in Saudi car rental firm

Investcorp’s Gulf Opportunity Fund has bought a 30% stake in Theeb Rent a Car, a Saudi car rental company.  

The fund will be represented on Theeb’s board where it will play an active role in making key decision, including both governance and future exit strategies, as part of the agreement.

Mohammed Al Shroogi, Investcorp’s president, Gulf business, said: “Theeb is a well-respected family business and a leading player in the Kingdom’s vibrant car rental industry. It is well positioned to grow driven by Saudi Arabia’s accelerating economy.  

“We will work closely with the Theeb management team to help grow the business. This is the fund’s10th investment within the region and its fourth in Saudi Arabia,” he said.


Theeb, founded in 1991, is the second largest car rental firm in Saudi Arabia. It employs 900 people and operates a fleet of more than 10,000 cars. Over the past three years, Theeb has generated more than 17% growth in revenue and net income. 

Walid Majdalani, managing director, Investcorp corporate investments-MENA, said: “We are enthusiastic about this partnership and about the company’s growth prospects given its leading position in a sector estimated at circa $1 billion and which has witnessed double digit growth over the last five years.”


Mohammed Al Theeb, co-founder and chief executive officer of Theeb, added: “With Investcorp’s reputation and active support, we believe we are well positioned to consolidate our leading market position and acquire further market share.”

MENA and Turkey: Turkish delights?

Turkey has all the ingredients for rapid growth, and is increasingly attracting the attention of GCC investors, especially those with a focus on private equity. But will the development of the country’s capital markets presage a wider boom in the asset management industry?

Bridging the gap between Europe and the Middle East, Turkey occupies an interesting position as an investment destination. Having overcome a major financial crisis at the beginning of the millennium, it now represents a story of rapid economic growth. Perhaps it is these growth prospects, as much as any geographical or cultural factors, that have led to growing numbers of Mena managers embracing Turkey as part of their investment universe.

Private equity has traditionally attracted attention from the Mena region, and for some, this is still the most interesting play. NBK Capital, one of the region’s most active private equity investors, has been investing in Turkey over the past seven years and has achieved some impressive results.

Fund manager Amjad Ahmad believes that consumer-driven sectors in Turkey are particularly appealing at the moment, given the young and growing population.

“We believe that the middle class will continue to grow with disposable income and spending also climbing,” says Ahmad. “As young people enter the workforce and begin to create families, significant pressure will be put on all forms of consumer goods and services, which presents a lot of opportunities.”

One reason private equity continues to flourish is that the underdevelopment of many companies provides fertile ground for an active investment philosophy. Ahmad says that initiatives to drive efficiency and productivity in companies have been central to NBK Capital’s returns.

“There are many good companies that have not yet transformed or modernised their strategies, processes and people. This presents an opportunity for us to invest and implement an array of value creating initiatives to make businesses more agile and dynamic.”

The $250m NBK Capital Equity Partners Fund I recently enjoyed a successful exit from Dunya Goz, Turkey’s largest chain of eye hospitals, in which it had invested since 2010.

Having a proper exit strategy and understanding the nuances of the market are crucial to making successful investments, stresses Ahmad. While Turkey has grown in popularity as both an emerging European market and a destination of Mena managers, it isn’t necessarily a straightforward landscape to traverse, and getting advice on local legal and regulatory systems is crucial.

Additionally, Ahmad highlights that unlike GCC investments which are predominantly pegged to the dollar, investments in Turkey are at risk to the fluctuations of Turkey’s free-floating Lira. “It is imperative to ensure that you have a strong capital structure with the right equity/debt mix.”

Stock market development

The public equity space also presents a mixture of challenges and opportunities. Göktürk Işikpinar, chief investment officer at AK Asset Management, one of the country’s largest asset managers, says that the number of listed firms is set for a rapid expansion.

“If you look at the current market, the free float is 29%. The Istanbul Stock Exchange is conducting a campaign to increase the number of shares listed there. The major market currently has 330 stocks, but plans to increase this number to 1000 by 2020,” says Işikpinar.

If these ambitions are realised it would be good news for the local asset management industry, which is gradually taking root in the country, helped in part by a growth in the number of pension funds.

Pension funds are certainly among the biggest clients for AK Asset Management, which manages an estimated $2.7 billion on their behalf. Işikpinar believes that Turkey will see further growth in this area, as the government tries to counter the low rate of savings and the current account deficit that have previously characterised the country.

He also believes mutual funds will see an upturn in their appeal as the low interest rate environment and demand for real estate (a very popular alternative to capital market products in Turkey) loses steam.

“I believe that in three to five years we are going to see more people demanding capital market products,” says Işikpinar. “We are at the beginning of a growth period in asset management.”

One factor that may inhibit regional asset managers looking to gain a foothold in the country is distribution power. Emerging markets manager Ashmore has been in Turkey for five years, starting from scratch to now managing $200m from Istanbul. Yet Didem Gordon, chief executive officer at Ashmore Portföy Yönetimi A.S (Ashmore Asset Management, incorporated in Turkey), admits that their distribution network remains relatively limited.

“Mutual fund distribution is dominated by banking networks, which independent asset managers such as us have very limited access to,” she complains.

Işikpinar agrees that the market can be difficult to break into. “Four large asset managers make up around 90% of the market and there aren’t that many foreign asset managers in Turkey at the moment.”

“Of course the market is open just like anywhere else. Whoever can establish innovative, competitive products - whether large or small asset management companies - will attract investor attention, and there are successful examples of that,” he adds.

Emerging market wobbles

In common with other emerging markets, Turkey has experienced volatility recently driven by fears surrounding the Fed’s mooted tapering of quantitative easing. “The general market sentiment has resulted in an outflow from Turkish listed equities as well as fixed income last month,” explains Ashmore’s Gordon.

She adds: “This led to increases in bond yields, going from 6% to 9% levels, which consequently led to a re-rating of listed equities. Valuations have been coming down at a very rapid rate.”

Nonetheless, the medium-term investment outlook remains positive, with estimated annual growth earnings of around 7% for 2013 and higher in ‘14, she explains. “When markets are normalised, we’ll see valuations taking effect and investments will flow into the most attractive markets.”

Gordon goes further in pointing out that market volatility can create additional opportunities for those who know how to exploit them. “The mispricing that can occur when there is a temporary disconnect between prices and fundamentals can create opportunities to amplify returns in the long-term. Our aim is to sift through the noise and make rational investment decisions based on our analysis and research.”

NBAD Asset Management’s head of equities, Saleem Khokhar, agrees. “I expect near-term volatility but this will create opportunities to enter the market at attractive levels as the long-term outlook remains bright.” Although the NBAD MENA Dividend Leader Fund doesn’t currently have any exposure to Turkish equities, it is within their potential investment remit.

Developments in the political arena can also play a marked role in the country’s investment space; Işikpinar highlights that regional instability caused by the prolonged Syrian conflict may present a challenge to the market. He also adds that local elections in March 2014 should be monitored closely.

The political protests that recently brought Turkey to the forefront of media attention have also added to the volatility in the market as well as making some investors more cautious.

“We want to increase exposure once again, but are first looking to see some stability around the current political events, and want to see the government focus back on the economy,” says Afa Boran, Head of Asset Management at Qatari-based manager Amwal (see box).

Local, parliamentary and presidential elections are all set to take place within the next two years, but NBK Capital’s Ahmad stresses that whoever follows in the footsteps of the current regime has fairly big shoes to fill. The AKP has presided over the pro-business policies which have seen the economy flourish and investments increase.

“The next government knows that the AKP’s policies have been beneficial for business and that they will have to maintain the momentum. No matter who wins the elections, economic development and growth will be a priority,” he says.

Clearly Turkey presents interested and savvy investors with plenty of opportunities, whether in private or public equity space. Nonetheless, current global economic trends, political developments as well as market competition make this emerging market more difficult to succeed in than some may imagine.

Abraaj preparing to launch $250m North African fund

The Abraaj Group is working towards the launch of a $250m private equity fund focused exclusively on North Africa, the firm’s Mena head has told Mena FM.

Ahmed Badreldin, partner and head of Mena at Abraaj, said that the new fund will be the second North African fund for the group, which manages $7.5 billion across 25 sector and country-specific funds.

“It is in the works, we have started fundraising and are launching it as soon as possible,” Badreldin told MENA FM.

The first fund – North Africa 1, worth just over $160 million - is fully invested and has 12 investments in North Africa across Egypt, Tunisia, Algeria and Morocco, according to Badreldin.

North Africa 2 will employ the same investment strategy as the previous one and will invest in mid-market companies in defensive sectors such as healthcare, IT and logistics.

“We focus on sectors which are defensive and have growth potential, whether they are export- focused or consumer-driven. We focus on mid-market strategy, our target size is around $15-30m,” said Badreldin.

The new vehicle is targeting a combination of development finance organisations, sovereign wealth funds, pension funds and high net worth individuals.

While the investment sentiment towards the region is currently negative due to political unrest, Badreldin is positive that Abraaj will be able to attract investors in the fund.

“The idea is to sell the unique story of North Africa to investors, because it is largely uncorrelated with the rest of the world and has huge potential,” he said.

“We have just completed our first exit in Tunisia last month, and we made a significant return on our invested capital despite the Arab Spring and all the political turmoil,” he stressed.

“From our perspective we see a lot of opportunities in North Africa. It is just a matter of raising the new fund and then going ahead and investing it. Once we have raised a new fund, we plan to continue investing in North Africa, continue creating jobs, which helps solve some of the problems which the countries are facing right now,” he concluded.

Gulf Capital acquires regional food company

Abu Dhabi-based Gulf Capital, one of the most active alternative investment firms in the Middle East, has announced the acquisition from Vintage Holdings of 100% of Chef Middle East LLC.

Gulf Capital believes the acquisition will diversify its portfolio and intends to work with the management team.

Chef is an importer and distributor of high-end, specialty and fine food products from around the world, established in 1995 in Dubai as a regional supplier of the finest quality foods to the hotel, food services, casual dining and airline industries.

Richard Dallas, Managing Director, Private Equity at Gulf Capital, commented: “The defensive nature of the food services sector, which has historically been resilient to recessions, and the leadership position of ‘Chef’ within this high-growth, demographically-driven niche subsector makes this acquisition ideal for us, and offers Gulf Capital a solid platform for future growth in the food sector.”

“We intend to work with the management team on enhancing the sophistication levels and professionalism of distribution and logistics in the region to help our customer base operate in a more efficient and reliable manner,” he said.

The food company supplies dry, chilled and frozen food products from many European countries, as well as Australia and Japan.

“‘Chef’ is a perfect addition to our portfolio and helps us balance it across the defensive sectors in the regional economies, where demographics are of an exciting nature and remain a fuel for growth in our geography of focus,” said Muhannad Qubbaj, Managing Director, Private Equity at Gulf Capital.

“With this acquisition, Gulf Capital will take ‘Chef’ to new heights, expanding the company’s reach by adding new territories and increasing the brand and product offerings,” he added.

Gulf Capital has acquired the shares and assets of ‘Chef’ through a leveraged buy-out structure funded by a combination of equity and debt from Abu Dhabi Commercial Bank.

Dr Karim El Solh, CEO of Gulf Capital, said: “We are excited to be exposed to the thriving food and consumer sector in a growing niche through a highly reputable market leader, such as ‘Chef’.”

“The strong underlying growth of the sector is driven by positive market fundamentals that continue to fuel the upward trend in the economy, including a booming population; growth in non‐oil sectors such as tourism, manufacturing, transport and logistics, and services; and an increase in consumer spending,” he added.

Actis invests $102m in Egyptian food company

Emerging markets private equity firm Actis has made a major investment of $102m in Edita Food Industries, a leading snack food business in Egypt.

The largest independent snack food firm in North Africa, Edita is known for its brands which include Twinkies, Hohos, Molto, Todo and Bake Rolz. It has been a notable success story in the Egyptian economy, growing its revenues at a compound rate of 21% per annum since 2009 despite the macroeconomic turmoil caused by the Arab Spring.

Actis, which invests in Africa, Latin America and Asia, has already made three similar investments in North African food businesses - Mo’men, El-Rashidi El-Mizan and Poulina – and the investment in Edita builds on this theme.

Rick Phillips, Head of Consumer at Actis, said: “This investment demonstrates our long term commitment to Egypt’s prosperity and our confidence in this important market. Actis continues to proactively pursue investments in high quality, well-managed businesses across the region.”

Sherif Elkholy, Actis Director in Cairo, added: “We are delighted to be investing in such a high quality Egyptian business, making this our fourth investment in the North African food sector. Under Mr. Hani Berzi’s leadership the company continues to thrive with its recent acquisition of iconic brands and ambitious plans to expand the business. We are confident that our partnership will be a great success.”

Hani Berzi, chairman and CEO of Edita, said: “We are delighted to welcome Actis on board as our new partner in Edita. We received numerous approaches from interested parties, but chose Actis because of its pan-emerging markets consumer sector expertise, and proven commitment to supporting strong resilient businesses regardless of economic cycles and political unrest. We look forward to continued growth and development with Actis in the next chapter in Edita’s journey.”

NBK Capital makes successful exit in Turkey

NBK Capital has announced the successful sale of its equity stake in Dunya Goz, Turkey’s largest chain of eye hospitals.

The sale, to the chain’s founding shareholder, represents a realisation for the $250m NBK Capital Equity Partners Fund I, the firm’s regional private equity fund focusing on Mena growth opportunities. The fund first invested in Dunya Goz in 2010. Since then, the company has expanded from six hospitals in four cities to eleven hospitals in eight cities, and has entered new markets in Germany, the UK and the Netherlands.

Amjad Ahmad, Head of Alternative Investments at NBK Capital, said: “Dunya was an attractive investment because of the growth in private healthcare, due to favourable regulatory trends and surging per capita income. Additionally, the company had a strong national brand with opportunities for scale.

“We continue to drive substantial value in our portfolio companies and seek timely realizations to deliver returns to investors. Our strategy of investing in midmarket growth companies in the MENA region and actively driving key value initiatives continues to deliver positive results.”

He said that the fund focuses on consumer-driven sectors including consumer staples, consumer discretionary, healthcare and education. NBK Capital, which also runs a mezzanine fund in its alternative investments division, is planning to launch a further private equity fund later this year.

“We are launching another private equity fund in the coming months and therefore we are actively reviewing new investments,” said Ahmad. “The region is compelling especially in the midmarket segment, given the opportunity for growth and operational improvement. The macro-economic outlook in a number of countries including Saudi Arabia, the UAE and Turkey is favourable with positive government initiatives driving increasing private sector activity and growth. The competitive landscape for private equity is rather interesting given the limited number of reputable GPs who have continued to operate after the global economic crisis and Arab Spring.”

NBK Capital aims to implement an active investment approach in its alternative investment portfolios, creating long-term sustainable value through strategic, operating, financial and corporate governance enhancements.

PineBridge Investments appoints new Mena CIO

Global independent asset manager PineBridge Investments has appointed Wael Aburida as its new Chief Investment Officer (CIO) for the Mena region.

Aburida will lead PineBridge’s Mena private equity and real estate team covering the Middle East, North Africa and Turkey, with responsibility for deal origination, negotiations, execution, portfolio management, and exits. Based in Bahrain, Mr. Aburida will report to Talal Al Zain, Chief Executive Officer at PineBridge Investments Middle East. 

He joins the firm from UAE-based Waha Capital where he was director of mergers and acquisitions. He has 20 years of private equity and investment banking experience, with his previous positions including being director of the Global M&A Group for Intel Corporation, and senior roles at Nollenberger Capital Partners and DCA Partners, all based in California.

Talal Al Zain said, “I am pleased that Wael has joined our expanding regional team of exceptional investment professionals. Wael is an ideal fit for PineBridge, bringing a broad range of global and regional expertise that will help us meet growing client demand for private equity and real estate solutions. We will continue to strengthen our team in order to capitalize on the region’s demand for investment opportunities.” 

Wael Aburida added: “I am very excited to be joining PineBridge at such a key juncture.  While private equity is slowing in some developed markets, there is significant regional demand for proprietary private equity and real estate deals. We will be capitalizing on this demand for high quality direct investment opportunities, rigorous due diligence and active portfolio management of investments.”

PineBridge’s private equity activity is focused on growth investments into business services, social infrastructure and industrial and manufacturing companies serving the growth-oriented demographics of the region. The firm, which has more than $70 billion under management worldwide, began operations in the region after receiving its license from the Central Bank of Bahrain in July 2012.