global buyout fund - initial closing at over usd500m
Global Investment House "Global" announced that its Global Buyout Fund L.P. (“the Fund”) has received aggregate commitment in excess of USD 500 million at its initial closing. The Fund aims to take majority/ controlling equity stakes in established private and listed companies in the Middle East & North Africa (MENA) and in Turkey, China, India and Pakistan.
Omar M. El-Quqa, Executive Vice President at Global Investment House, said that the overwhelming response in the initial closing further reinstates our belief in the success of the Fund’s strategy. He added that the Fund has attracted participation from institutional investors sovereign and pension funds and family offices from the region and around the world, He also added that this is one of the few funds that truly concentrate on investing in the MENA region, specifically GCC coupled with the fact that it will focus on taking a controlling stake in transactions.
El-Quqa added that the private sector in the MENA region has been dominated by family–businesses, which makes it imperative for private equity funds to develop a deep understanding of the local culture and business practices, and also have strong relationship in order to generate proprietary deal flow. He added that the Fund is well positioned to meet this challenge, as Global has firmly established itself as one of the largest investment companies in the MENA with region-wide presence and strong local partnerships.
Shailesh Dash, Senior Vice President and head of private equity investments at Global Investment House, added that the initial closing of the Global Buyout Fund brings the total funds currently under management of his team to over USD 1.5 billion. He added that the success of the Global Buyout Fund in attracting USD500 million within a very short period of offering is due to the team’s successful track record as reflected in the impressive return on investment achieved by the other private equity funds that are being managed by his team.
The Fund has already concluded its maiden investment in Al Jazzeera Steel Company, SAOG, a leading steel manufacture from Oman and listed on the Muscat Securities Exchange. It is now concluding three other transactions that include one of the largest financial services companies in Turkey, a building material company with a strong brand recognition in the MENA and a leading pharmacy chain in the GCC. Upon conclusion of these investments, the Global Buyout Fund would be invested up to nearly 60% of initial closing commitment, and before the second closing, providing a huge potential upside to investors.
Dash also stated that his private equity team has expanded to over 30 members to ensure that we meet and exceed the stated objectives of the different funds under management. The team collectively maintains a broad network of institutional relationships and has completed 44 investments across MENA, Turkey and Asia..
The Fund is also endorsed by leading international financial institutions including JP Morgan Cazenove and Bear Stearns International. Dash was delighted by the strong interest from pension funds, family offices, university endowments, and financial institutions of Asia, Europe and North America towards the region, and specifically towards the Fund. He added that this is among the first truly regional Fund that was showcased to international institutional investors, not with the simple objective of attracting capital, but also with a broader mission to highlight the region as an alternative investment destination in the emerging world.
The Fund has an investment period of three years, but on a fast track basis could be fully invested within a two-years. This will greatly benefit the investors. The investment management team has a successful history of such fast track investment wherein it completed over 40 transactions and committed over USD700 million within a span of 18 months for the two Global Opportunistic Fund and the Global Opportunistic Fund II.
The Fund has a target size of USD 1.5 billion (Islamic portion of 0.5 billion) and is likely to comprise of 20 companies, collectively targeting an average IRR of 20% p.a. over the life of the Fund. One of the salient features of the Fund is a challenging hurdle rate of 15% without catch-up unlike other funds that have no or hurdle rates or single digit hurdle rates.
The Global Buyout Fund LP is a Cayman Islands exempted limited partnership. Global Capital Partner Ltd., an exempted Cayman Islands company is the sole General Partner of Global Buyout Fund LP. The partnership invests’ in listed and private equity opportunities across Middle East & North Africa including Turkey with the objective of builds-ups and support the management/ business to generate higher shareholder value. The Fund is managed by Global Capital Management Ltd, a wholly owned subsidiary of Global Investment House KSCC (“Global”).
