Abraaj Capital, the premier investment firm specialising in private equity investment in the Middle East, North Africa and South Asia (MENASA) region, announced today a strong first closing of its Infrastructure and Growth Capital
Fund (IGCF) with commitments of US$500 million as of December 31, 2006.
The fund is being managed by Abraaj Capital and co-sponsored by Deutsche Bank and Ithmaar Bank. Upon final closing, the US$2 billion IGCF will be the largest fund ever raised in the region.
Arif Naqvi, Vice Chairman and Chief Executive Officer of Abraaj Capital, said: “The extremely strong response to the fund is indicative of the high level of investor confidence in our ability to provide risk-adjusted returns well above industry benchmarks. Subsequent closings will occur monthly until June 2007, with a final closing shortly thereafter. The pipeline of deals ready to go into the fund now or in very advanced stages is extremely strong. As a consequence we will need to manage fund closings to ensure that early investors are not penalized by carrying investments for later investors. It is likely that closings after March will begin to attract premiums.”
IGCF will have a target IRR (internal rate of return) of 20% on invested capital contributions and a life of ten years. IGCF’s predominant focus will be to take majority/minority stakes in greenfield projects, growth capital investment opportunities and to participate in large-scale privatisations and buyouts.
The key targeted sectors for the fund will be: Power and Utilities, Water, Healthcare, Education, Transportation and Ports, Oil and Gas, Petrochemicals, Industrials and Mining. The investment opportunities in these sectors exceed well over US$630 billion, according to “The Infrastructure Investment Requirements of the MENASA Region,” an Abraaj Capital research report that was unveiled recently.
Commenting on the announcement, Khalid Janahi, Chairman of Ithmaar Bank, said: “We are delighted by the investor response to this unique fund, which is the result of the powerful partnership between Ithmaar Bank, Abraaj Capital and Deutsche Bank. Here at Ithmaar, we are especially pleased to take an active role in bringing this asset class to Shari’a-compliant investors.”
Ashok Aram, Managing Director at Deutsche Bank, said: “The fast-growing MENASA region is replete with investment opportunities, perhaps nowhere more so than in infrastructure. As one of the world’s largest financial institutions, Deutsche Bank is extremely pleased to bring its experience and insight to this partnership – and to the IGCF.”
