Gulf Arab firms and Deutsche Bank plan to raise a $2 billion Islamic private equity fund to invest in infrastructure in the Middle East, North Africa and South Asia.
The fund's sponsors said they wanted to tap into burgeoning regional demand for private equity investments as well as the pool of funds in the Islamic finance industry, one of the world's fastest growing niche financial markets.
The fund will be the largest of its kind in the region, Arif Naqvi, chief executive of Dubai-based Abraaj Capital, told a news conference.
Abraaj, will manage the fund, co-sponsored by Bahrain-based Ithmar Bank and Deutsche Bank.
The Infrastructure and Growth Fund will invest in greenfield projects across the region, focusing on petrochemicals, power water, manufacturing and financial services. It will also provide capital to turn around underperforming companies and look to play a role in privatisations, Naqvi said.
The fund will target an internal rate of return of 15 percent per annum and have a life of 10 years.