Ithmaar Bank, a prominent publicly quoted investment bank based in Bahrain, announced today that it was targeting US$630 billion in regional infrastructure investment opportunities through its US$2 billion Shari'a-compliant Infrastructure and Growth Capital Fund (IGCF).
The fund is being managed by Abraaj Capital and co-sponsored by Ithmaar B ank and Deutsche Bank. The IGCF will be one of the largest funds ever raised in the region, and it brings together for the first time the leading private equity firm in the region, along with a leading investment Bank and a leading global investment Bank.
The fund will have a target IRR (internal rate of return) of 20% p.a. and have a life of ten years. The predominant focus of the fund 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 an Abraaj Capital research report that was also unveiled today.
Commenting on the announcement, Mustafa Abdel-Wadood, Managing Director of Abraaj Capital, said: 'The initial response from investors to this fund has been extremely strong. In partnership with two outstanding institutions, we are delivering an unparalleled opportunity for investors to participate in the economic growth of the region. Based on the response to date, it is clear that our confidence in this offering is widely shared.'
Sheikh Salman Al-Khalifa, Managing Director of Ithmaar Bank, said: 'Our experience in Islamic Finance will complement the global strength and intellectual capital of Deutsche Bank and the proven track record of Abraaj Capital to create the perfect partnership. We are convinced that the skills that each partner brings to the joint venture will make this fund a great success.'
He added: 'Ithmaar itself and through its interests internationally has enormous experience in the field of Shari'a-compliant projects and is recognised as a global leader in this field. It was a co-sponsor and co-manager of the IDB-DMI Infrastructure Fund, the first of its kind in the region. We believe that bringing this asset class to Shari'a-compliant investors is a major step forward in the world of Islamic finance products.'
Ricardo Honegger, Managing Director, Global Markets, Middle East and North Africa, Deutsche Bank, said: 'As one of the world's largest financial institutions, Deutsche Bank has identified this region as important to its continued growth. The coming together of critical and complementary skills in this 'Infrastructure and Growth Capital Fund' provides investors a unique opportunity to participate in the ongoing economic growth and long-term development of this region.'
