Dubai-based private equity group Abraaj Capital, which has raised about US$ 7 billion since inception in 2002, announced today the opening of its office in the Saudi Arabian capital Riyadh with a dedicated investment team to tap growing opportunities in the largest Arab economy.
The team of eight, headed by Executive Director Sari Anabtawi, 46, will work to identify new investment opportunities as well as work with existing Abraaj partner-companies to grow their business in Saudi Arabia and the region.
The office is Abraaj’s fourth outside the United Arab Emirates as the company expands across its investment region; the Middle East, North Africa and South Asia (MENASA). The US$ 465 billion economy of Saudi Arabia, the world’s largest oil exporter, has been growing at an average 4 per cent per year for the last five years, driven in part by a private sector that has reaped the benefit of increasingly business friendly government policies.
"As the largest Arab economy and the centre of the energy world, Saudi Arabia offers substantial investment opportunities," said Amr Dabbagh, Governor of the Saudi Arabian General Investment Authority, which licensed Abraaj Saudi Arabia Ltd.
"The economy is more competitive than ever. In ‘ease of doing business’, the World Bank ranks Saudi Arabia 1st in the region. In many areas of the economy demand outweighs supply, while the kingdom's fiscal position is very strong," Mr. Dabbagh said.
The World Bank last year ranked Saudi Arabia 16th in the world for ’ease of doing business’, up eight places compared with 2007. The ranking of 181 economies includes measures such as ease of starting a business, dealing with construction permits and protecting investors.
“The opportunities to invest in Saudi Arabia are immense given the kingdom's position in the MENA region and its relative insulation from the global economic downturn," said Arif Naqvi, Abraaj’s Founder and Chief Executive Officer. “Whether in transportation, logistics, food, healthcare or education, demand is growing and under-served in terms of existing supply, driven by population expansion and fresh government policies that encourage private investment."
Abraaj, which last year distributed US$ 1.6 billion to investors, is no stranger to Saudi Arabia. Its chairman is Sheikh Abdulrahman Ali al-Turki, one of the kingdom’s most prominent businessmen and owner of ATCO Group.
Abraaj group executives have worked in Saudi Arabia since the 1990s. In 2005, Saudi investors of Abraaj bought a stake in National Air Services (NAS), helping it secure the kingdom’s first private passenger-airline license. They sold the stake last year, generating an internal rate of return of 52 per cent.
“Many of our investors come from Saudi Arabia,” said Sari Anabtawi, who brings 20 years of banking and finance experience to his role, including with Morgan Stanley & Co. and Standard Bank, Africa’s largest lender. “They have long been loyal to us and we are loyal to them. Keeping them constantly updated in these challenging times and aware of the opportunities is integral to our business.”
Through its funds, Abraaj holds stakes in more than 25 companies in the MENASA region, including Tadawi, Saudi Arabia’s largest pharmaceutical wholesaler and retailer; Air Arabia, the Middle East’s largest low-cost carrier; Acibadem, Turkey’s biggest operator of premium hospitals; and Al Borg Laboratory, the Middle East’s biggest medical-testing laboratory company.
“One of our key priorities is to help our partner companies, like Tadawi and Al Borg, expand in their home countries and across the region to take advantage of the many cultural and demographic similarities and synergies,” said Mr. Naqvi. “We help bring strategic direction, operational expertise and the benefits of a deep, regional network of business contacts to our partners, with the long-term aim of unlocking value.”
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