JEDDAH, 10 April 2006 — Investors have shown tremendous interest in the newly-launched Al-Tawfeek Private Equity Fund by Al-Tawfeek Company for Investment Funds Ltd. The company is a member of the Dallah AlBaraka Group, one of the major providers of Shariah compliant investment funds in the region.
The fund, the first Shariah compliant private equity fund incorporated in Bahrain, claims to offer an attractive investment opportunity to primarily invest in late or expansion stage Shariah compliant private equity investments and pre-IPOs in the Middle East and North Africa (MENA).
Al-Tawfeek, which has been successfully investing in private equity in MENA for more than a decade, is confident of sourcing potential opportunities through strong deal flow, hence will be seeding the fund with $20 million. The fund, approved by the Bahrain Monetary Agency on Feb. 14, is established for a period of five years commencing from the closing date with a target capital of $100 million. “Investors have shown keen interest in the fund since its recent introduction,” a top executive of Al-Tawfeek told Arab News yesterday.
“The private equity industry in MENA has witnessed tremendous growth over the last two years. In the past the exit strategy for MENA private equity investments has primarily been trade sales. With changes in the laws and regulations and the launch of regulatory authorities, financial exchanges and financial centers, such as the Capital Market Authority in Saudi Arabia, the Dubai International Financial Exchange and the Qatar Financial Center, IPOs are becoming a more convenient route for exits,” Al-Tawfeek CEO Hassan Salim Alammari said. The change in the regional investment infrastructure has supported the MENA private equity industry to leap into the next stage of its development and growth. It has encouraged family offices to divest their private businesses through IPOs. “MENA private equity as an asset class is still in the early stages and is expected to continue to attract an increasing share of investment capital and outperform other asset classes in the years to come,” he added.
Alammari added that the region had experienced exceptional growth in recent years. For 2003 and 2004, the economic growth averaged more than 5.6 percent a year, the strongest growth in a decade, driven largely by increasing oil revenues and ongoing economic reform. Aside from oil, the region has substantial gas reserves and the production of gas is projected to grow more rapidly than oil. “The outlook for the MENA region is upbeat; the oil and gas reserves of the region are critical to meeting the world’s growing appetite for energy. MENA countries are expected to spend $1 trillion on the oil and gas sector between 2006 and 2030. The projected oil and gas export revenues together with the expenditure from the governments and the private sector will support the region’s economic development,” he said.
Al-Tawfeek, a specialist financial investment company incorporated in 1992 in the Cayman Islands with $1.5 billion under management, is one of the financial arms of Dallah AlBaraka Group, one of the largest conglomerates in Saudi Arabia with total assets in excess of $12 billion, with companies operating from more than 40 countries. Al-Tawfeek is a leading provider of Shariah compliant investment funds, and its strategy is primarily aimed at providing investors with superior Shariah compliant investment opportunities in an increasingly competitive market.
Since inception Al-Tawfeek has launched a number of Shariah compliant investment funds covering varieties of asset classes including equities, corporate debt, real estate, private equity, venture capital and leasing. Al-Tawfeek claims to have yielded high returns for its investors in a number of Shariah compliant investment funds.
The new fund is a close-end collective investment scheme with the objective of achieving long-term capital appreciation by primarily investing in late stage Shariah compliant private equity investments and pre-IPOs in MENA.