Global Capital Management Ltd, the alternative investment funds’ arm of Global Investment House announced today that Global Opportunistic Fund I "GOFI" is declaring a distribution, primarily derived from a combination of gains from divestment as well as dividends from portfolio companies. Post this distribution, the aggregate amount distributed till date would be approximately 30%.
GOF I, a private equity fund managed by Global, invests in late stage private equity opportunities within GCC.
Significant portion of this distribution was generated from partial divestment of DEPA during the current and the last quarter at an IRR of more than 22% on the transaction for the fund. The other bulk of this distribution comes from dividends received from portfolio investments –Gulf Healthcare International, DEPA and Gulf Navigation. Through these tough economic times, GOFI’s investment in these diversified businesses is paying off well.
Mr. Shailesh Dash, Managing Partner at Global Capital Management said “The fund was one of the initial and leading investors in DEPA. We have been liquidating our position in tranches to optimize our returns and I am happy to state that we have attractive net return to GOF I.”
DEPA has shown remarkable growth over the last few years and even in these challenging times it reported a 40% increase in revenues and 21% increase in net profits for Fiscal 2008 compared to Fiscal 2007. Even for the 1st half of the current fiscal DEPA reported 49% increase in revenues and 65% increase in profits compared to the corresponding period last fiscal. The efforts of management towards improving efficiency undertaken during last fiscal have started to reap benefits as margins increased to 8.3% from 7.5% during the corresponding period last fiscal.
The management has diversified its business geographically in such a manner that the impact of slowdown in Dubai has been mitigated significantly. Even the customer base is broad and no single customer accounts for more then 8% in revenues. Current order book is of US$ 700 million, consisting of 190 projects is approximately 16 months of revenues.
Mr. Dash stated that “The Investment philosophy is to look for businesses which are resilient in nature and management that is focused on increasing efficiencies and flexible to adapt to newer challenges. DEPA is one of the classic investments that have delivered as per expectations”.
He added “The strategy of GOF I has always been to maintain some liquidity in the investment portfolio so that we can give out investors regular returns. It is noteworthy that GOFI still has other listed investments in its portfolio which should ensure liquidity flowing back to our investors constantly”.
Mr. Shailesh Dash opined “Global Capital Management had the foresight to focus a huge portion of our funds into defensive sectors, as we believe that good fund managers must be able to generate returns not only in bull markets, but during economic crisis, such as the one we are experiencing now.”
It is worth mentioning that GOF I seek capital appreciation with optimum returns, within controlled levels of risk, over the medium to long term by investing in late stage as well as growth opportunities in the target countries. The Fund is now fully invested across 23 investments and 8 of these are listed. The focus is that at opportune times, there would be further divestments resulting in distributions to our investors.
Global Capital Management is a leading alternative investments asset management company in the MENA region managing ~US$ 3.0 billion of assets in alternative asset class. It has one of the largest PE teams in MENA with ~45 professionals comprising 12 nationalities. The team has cumulative work experience of over 300 years and is based out of four locations Kuwait, KSA, Egypt and Turkey.
The team has invested more than U$1.5 billion in 55 transactions across 11 sectors in MENA, Turkey, South Asia & China during the past 4 years. The team has also successfully managed 15 exits generating an IRR of 67% as of Dec’08 for its existing investor base which comprises international and MENA institutional investors. Its achievements have been recognized at product and deal level through various awards. Recently, PEI has also ranked the Company as one of the top 20 private equity firms in Asia.
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