abraaj capital announces record us$1.2 billion second closing of its infrastructure and growth capital fund

abraaj capital announces record us$1.2 billion second closing of its infrastructure and growth capital fund
 
• IGCF becomes largest private equity fund in history focused on MENASA region
• Second closing driven by strong response from across MENASA, Asia and Europe
• Abraaj has made five investments to date for IGCF, including Air Arabia, GEMS, EFC, Al Nouran Holding and Acibadem  
 
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 record US$1.2 billion second closing of its Infrastructure and Growth Capital Fund (IGCF), providing the fund with total commitments of US$1.7 billion as of September 30, 2007. The first closing of IGCF yielded US$500 million by December 31, 2006.
 
IGCF, which is expected to be capped at US$2 billion upon final closing before the end of 2007, is now the largest private equity fund in history focused on the MENASA region. The international fundraising efforts were led by Deutsche Bank, which is also a partner in IGCF.
 
Abraaj has already made five investments for IGCF during 2007, including  a strategic pre-IPO stake in Air Arabia, the first and leading low-cost carrier in the MENA region; the 100 per cent acquisition of Egyptian Fertilizers Company (EFC), which was the largest private equity-led leveraged buyout in the history of the MENA region; a strategic stake in Global Education Management Systems (GEMS), the leading K-12 education provider in the Middle East; and a strategic stake in Acibadem, Turkey’s leading healthcare operator. 
 
Using its own corporate resources, Abraaj and its co-investors have made investments totaling over US$1.4 billion, of which the IGCF component comes to approximately US$800 million. As a result, almost 40 per cent of IGCF was invested even before the second closing, providing a huge potential upside to investors.
 
Arif Naqvi, Chief Executive Officer of Abraaj Capital, said: “Over the past few months, Abraaj has been delighted by the response from the investor community in Asia, Europe, North America and across the MENASA region, including pension funds, family offices, university endowments, insurance companies and financial institutions. In fact, 92 per cent of the total cash raised comes from such institutional investors. Based on our track record and our unrivalled access to deal flows across the region – and the particular appeal of IGCF – we secured US$1.2 billion in fresh commitments to the fund, profoundly broadening our investor base with 30 per cent of those commitments coming from outside the MENASA region.  This was significantly in excess of our expectations for the second closing and positions us very nicely for the planned final closing before the end of this year.”
 
He continued: “The transactions in which we have invested are exceptional, representing companies that are market leaders in their respective sectors, which should enable us to comfortably surpass our benchmark returns. Indeed, we expect the fund to be fully invested within a two-year time frame, a record that will greatly benefit the investors who have participated in this fund.”
 
Sheikh Abdulrahman Ali Al-Turki, Chairman of Abraaj Capital, commented on this development: “These fundraising activities have provided access to MENASA’s compelling economic story for the first time to a new group of investors from the global financial community. As such, Abraaj is now a major conduit for international capital flows into our region, which is clearly well-positioned in terms of sustainable economic growth and public-private partnerships for many years to come and is being perceived as such by the global investment community.”
 
Ashok Aram, Head of Bond Origination and ECM for CEEMA at Deutsche Bank, led the global fundraising programme on behalf of IGCF and added: “A second closing at a high level for IGCF in less than a year since the fund’s activation is an achievement, particularly considering the current global investment climate. It has allowed us to offer our international investors a chance to participate in the growth opportunities in the MENASA region.”
 
The key targeted sectors for the fund include: Education, Transportation, Ports, Healthcare, Power and Utilities, Oil and Gas, Petrochemicals and Industrials. 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.