Global Investment House "Global" announced today that Global Opportunistic Fund II (GOF II), a Pre-IPO and IPO fund, has made significant gains from two major investments in China and India.
GOF II, a private equity fund managed by Global, invests in Pre-IPO and IPO opportunities in the MENA region as well as India, China, Pakistan and Turkey.
Mr. Shailesh Dash, Senior Vice President and Head of Private Equity at Global, said the that GOFII has liquidated its stake in Zhaojin Mining Industry Limited in China and partially liquidated its stake in Reliance Petroleum Limited in India.
“The substantial increase which gold and oil prices witnessed recently enabled GOF II realize some profits, making it the right time to exit the investments.”
“The gold prices had increased to a level that matched with our expectations and we had a decent return on the investment. The Fund therefore took the decision to book the profits and return some of the capital back to our investors,” Dash elaborated.
As for the Reliance Petroleum investment, the Global SVP affirmed that the share price of the same “has increased substantially since the time of our investment and GOF II realized some of the profits on the same.”
Zhaojin Mining Industry Limited is China’s second largest gold mining company in terms of gold reserves and GOF II was one of the select cornerstone investors of this company, he added.
“The investment rationale was based on the expectation that the gold prices will substantially increase in the near term and Zhaojin, being one of the largest and most efficient producers of the yellow metal in China, will benefit from the same,” Dash explained.
He pointed out that the company had doubled its net profits in 2006 on the back of a 25% growth in production and surging gold prices. GOF II realized an IRR of 48% and absolute return of 55% on this transaction.
Dash said that GOF II has also partially liquidated its stake in Reliance Petroleum Limited, the largest private sector company in India with assets of around USD21 billion (as of 31 March 2007).
“The fund was one of the top ten investors along with Chevron, Deutsche Bank, Citigroup, and Fidelity. RPL’s project is on track and the refinery is expected to be commissioned within the scheduled date.”
The Global SVP affirmed that the share price of the same “has increased substantially since the time of our investment and GOF II realized some of the profits on the same.”
He concluded by saying that “GOF II believes that there is still considerable value in the company which is yet to be unlocked and continues to hold part of is equity stake in the company,” pointing that the transaction resulted in an IRR of 100% and absolute return of 2x.
It is worth mentioning that GOF II seeks capital appreciation with optimum returns, within controlled levels of risk, over the medium to long term by investing in IPO and Pre-IPO issues in the target countries. The Fund would target IPO's of stable, mature and profitable businesses and invest by leveraging on the Managers understanding of the respective markets.
About Global Investment House “Global”
Global Investment House “Global” is a full-fledged investment company incorporated in 1998, and falls under the regulation of the Central Bank of Kuwait. Its underlying foundation is to meet the high expectations of local and international clients, and to enhance the investment service industry and the capital market in Kuwait and the region. Today, Global stock lists on the Kuwait, Bahrain, and Dubai Stock Exchanges, with branches and affiliates in Bahrain, Dubai and Abu Dhabi (UAE), Jordan, Qatar, and Sudan. Global plays an important role in promoting investment opportunities in the Arabian Gulf Peninsula to investors through expert financial engineering, in-depth research and reports to advance the capital market in the region. Thus, Global’s achievements have been recognized on local, regional, and international levels. The company’s current assets under management reached KD2.39 billion (USD8.3 billion) as at 30 June 2007.
