Abraaj Capital, the largest private equity firm in the Middle East, North Africa and South Asia region announced on Saturday the final closing & its 500 million dollars second Buyout Fund (ABOF II), the largest fund ever to be raised in the Middle East.
"The reputation and track record of Abraaj capital has allowed us to raise and close ABOF II in record time" said Arif Naqvi, Executive Vice Chairman and CEO of Abraaj Capital.
"We are very positive about the future economic prospects of the region and over the next few years we will be using this fund to act as a catalyst for growth in the Middle East and return superior risk adjusted returns to our shareholders as we have done for the last 4 years.
With the closure of the new fund, we now have 1 billion dollars of assets under management. We are already at an advanced stage on a number of acquisitions for the fund to invest in.
We are excited at the numerous prospects ahead of us where we can do what we do best, that is unlock potential and create value in mature businesses across the region that can benefit from our expertise, and acquiring companies from the region that can compete regionally and indeed globally as well."
The demand for this fund has been unprecedented. Originally capped at 500 million dollars, ABOF II received demands exceeding 850 million dollars, prompting the decision to accelerate the closing to November 30, instead of the earlier announced target date of December 31.
The overwhelming response has not been limited to high net worth individuals and family groups. A number of international institutional investors have made regional investments for the first time bringing a strong international flavour to ABOF II. From the region, a large number of state-owned pension funds have also taken a stake in ABOF II, as well as the prominent financial institutions in the region.
"The size of this fund is a landmark in terms of the history of the private equity industry in the Middle East", said Sheikh Abdulrahman Al Turki, Chairman of Abraaj Capital and one of Saudi Arabia's most respected business leaders. ABOF II shares the same investment approach and strategy as its earlier sibling ABOF I. We invest opportunistically and are not sector specific.
We identify deals before we seek to raise the funds and will honour our commitment to investors by declining demand in excess of 500 million dollars", he continued.
Abraaj Capital has an extremely distinguished board of directors who oversee its business. Apart from Sheikh Abdulrahman Al Turki and Arif Naqvi, it includes regional business leaders such as Hussain Al Nowais (non executive Vice Chairman), Sheikh Sultan al Qassimi, Bassam Ghais and Hamid Jaffer from the UAE, Sheikh Nawaf Nasser bin Khalid al Thani from Qatar, Saud Kanoo from Bahrain, Fadi Ghandour from Jordan and Ashok Aram (representing Deutsche Bank).
The executive director team comprises of Shirish Saraf, Humayun Shahryar, Waqar Siddique, Simon Davies and Frederic Sicre, who lead a team of over 70 professionals.
Deutsche Bank has been a shareholder of Abraaj Capital since inception and is extremely pleased with the progress of the firm and the role it has played in catalysing the private equity industry in the Samena region. The commitment of the team and the quality of its transactions bodes well for the future and its role in the further evolution of regional markets" said Ashok Aram, Managing Director at Deutsche Bank in London.
Abraaj Capital's first family of funds Abraaj Buy Out Fund I (ABOF I), Abraaj Special Opportunities 1 (ASOF 1) and Abraaj Real Estate I (AREF I) are fully invested and have all tracked internal rates of return well over 50 percent, reported in compliance with European Venture Capital Association guidelines. ABOF I largely returned initial invested capital to its shareholders within 18 months thanks to the highly successful exits of Aramex International and Oman National Investment Corporation Holding (ONIC) and is the predecessor fund to ABOF II.
"Private equity is an asset class in full expansion throughout the region, and an investment vehicle of growing importance to international institutions such as DIC," added Sameer Ansari, CEO of Dubai International Capital, one of the anchor limited partners in the new fund.
"Abraaj Capital is the only private equity firm in the region which has been able to deliver an IRR of 50 percent or more on all of its past investment funds during both good and bad times. The track record and talent of entrepreneurship in the firm are deeply entrenched which encouraged the investment arm of DIC to make this investment in ABOFII," he continued.
"CVCI's investment in Abraaj - a premier private equity house in the Middle East reflects our confidence in their team and its ability to generate superior returns in a region with burgeoning opportunities," said Dipak Rastogi, Vice Chairman, Citigroup Venture Capital International. Shirish Saraf and Frederic Sicre, Executive Directors at Abraaj Capital put the fund into a macro-economic context.
"The future economic outlook in the Middle East for the next 3 to 5 years will be unprecedented in terms of economic opportunity. Strategically it is important for all players to use this position of strength to focus on long-term growth. Private equity represents the best insurance against short term risks and we feel it is important to remind the market of this, especially in the times of current euphoria in the regional capital markets.
We are a regional firm and are represented through our diversified body of over 200 shareholders within the 5 funds operated by us and with whom we form strategic partnerships. We work with our investors to identify potential before anybody else does.
We are also a trusted partner for governments as privatisation efforts gain momentum across the region. We intend to continue to play our role as a firm that drives economic change and creates value for our investors."-PR