Global Investment House "Global" announced today that the placement into its Opportunistic Fund II, the Pre-IPO & IPO fund have received commitments of over USD 200 million during the first week of its launch.
Global launched the fund last week in Dubai, UAE. It focuses on 17 countries in the GCC, MENA & Asian regions including China, India and Pakistan.
Mr. Omar M. El-Quqa, Executive Vice President in Global affirmed that the fund is witnessing massive subscription as a result of the impressive performance of its earlier Opportunistic fund that focused on the GCC market which is making a distribution to its unit holders in less than 8 months since closing.
“The success of the earlier fund which has over USD550 million under management with existing commitments in excess of USD 400 million in the Pre-IPO and IPO sector has encouraged investors to express their commitments towards the new Global Opportunistic fund II to secure their participation in this fund,” he added
He pointed that the fund had an excellent start since its launch on April 16, 2006 as it secured a significant stake in Reliance Petroleum Pre-IPO which has Chevron as a promoter along with other qualified institutional investors such as Fidelity, Goldman Sachs, Citigroup, Deutche Securities etc.
The USD600 million Reliance Petroleum IPO closed on April 20, 2006 raising over USD32 billion (over subscribed by 55 times) and had a world record of applications from over two million investors across globe.
Reliance Petroleum IPO is meant to part finance a refinery at the special economic zone at Jamnagar in Gujarat, India, slated to be the sixth largest refinery in the world on completion. The main promoter, Reliance Industries Limited (RIL), a Fortune 500 company with USD18 billion market capitalization, currently operates the third largest refinery in the world and is one of the largest private sector companies in India.
Global Opportunistic Fund II with a target capital of USD1 billion aims to achieve superior returns by investing in equity and equity related IPO and Pre-IPO securities in the target countries, where the eventual exit strategy will be through listing on the local stock exchanges in the respective countries.
The Fund has targeted 17 countries based on their superior macroeconomic characteristics such as increasing per capita income & healthy population growth over 3.5%, significant privatizations transactions and excellent performance of the respective capital markets.
El-Quqa revealed that the fund, in addition to Reliance Petroleum investment, has built up a significant pipeline of transactions that includes opportunities in China, Saudi Arabia, Qatar, Turkey, India and the UAE.
In addition to these transactions, there are over a significant number of IPO’s planned in the target countries, for e.g. China has over 80, Saudi Arabia in excess of 70 and India over 100 IPO’s.
“Global through its relationship and presence in these key markets will be ideally positioned to capitalize on this opportunity.”
With the fund already receiving commitments in excess of USD200 million in the first week and Global also receiving positive feedbacks from other leading institutions for promoting the fund in their respective countries, Global expects to receive the required commitments of USD1 billion much earlier than the indicated closing date, the Global official added.
However, El-Quqa stressed that although there are aggregate issues over USD50 billion planned in the next 6 – 12 months in the target countries, Global wishes to raise only USD1 billion so as to participate in issues that are the “crème de la crème” in the target countries.
He ended by saying that Global expects the demand for the fund to remain on the increase as the clients’ interests continue and will adopt a strategy of closing the fund on reaching USD1 billion, which keeping the current commitments, may be in the month of May itself.
“The allocation to the Fund will be on a first come first serve basis.”
