Al-Futtaim Capital launches US$500 million real estate fund

Published February 21st, 2007 - 12:05 GMT

Al-Futtaim Capital, the investment and development arm of the Al-Futtaim Group, the leading business conglomerate in the UAE, announced today the launch of a US$500 million real estate development fund. The fund will focus on large scale urban mixed-use developments in the Middle East and North Africa region.


Al-Futtaim MENA Real Estate Development Fund will be managed by Al-Futtaim Investment Management Limited (AFIM), a DIFC incorporated company wholly owned by Al-Futtaim Capital. AFIM has recently been authorized to manage investments by the Dubai Financial Services Authority (DFSA). Al-Futtaim Capital will contribute $75 million or 15 percent of the fund’s total value of $500 million.


Mr. Omar Al-Futtaim, CEO of the Al-Futtaim Group said, “This move is yet another firm step forward towards Al-Futtaim Group’s increased activity in the financial services arena. Al-Futtaim Group will bring the talent of its experienced real estate team and its proven track record and success to third party investors for the first time.”


Dr. Omar Bin Sulaiman, Governor of the DIFC, said, “We are pleased to welcome Al-Futtaim Investment Management into the growing DIFC family. We are confident that the benefits of the DIFC’s strong regulatory framework and global recognition will enable AFIM to develop and expand its business successfully.”


He added, “AFIM’s inaugural fund demonstrates the DIFC’s suitability as a platform for the growing fund management business. By providing investors with local and international expertise, a secure environment for their assets and a diverse range of financial products, we have laid the foundation for the development of regional wealth.”


Al-Futtaim MENA Real Estate Development Fund will focus on key cities within the MENA region including Abu Dhabi, Casablanca, Algiers and Cairo. Several potential deals have already been identified in these cities. The fund will seek to leverage Al-Futtaim Group’s experience gained primarily through the Dubai Festival City development and to replicate this unique high quality mixed use environment elsewhere in the region.


Mr. Marwan Shehadeh, Managing Director, Al-Futtaim Capital and Senior Executive Officer of AFIM said, “There has been a growing appetite for the real estate asset class among regional institutional investors and we wanted to open up and share our experience and track record with such institutions. This new line of business for the Al-Futtaim Group complements nicely our established real estate development and retail businesses.”


“We believe this kind of investment vehicle will allow investors to get exposed to a very promising asset class which will give them an opportunity to earn strong risk adjusted returns. Through this fund, we aim to provide investors with a unique opportunity to participate in the ongoing economic growth and unprecedented favorable macro economic environment for the regional real estate sector,” added Marwan.


This institutional fund has been carefully structured in line with the best practices in the current private equity fund environment to appeal to a wide range of well capitalized investors.  The leading US investment bank Morgan Stanley & Co. International is acting as the fund’s structuring advisor and placement agent.

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