KUWAIT, 5 March 2007 — Capitalizing on its private equity experience, Global Capital Partners Ltd. (wholly-owned subsidiary of Global Investment House) launched on Saturday the “Global Buyout Fund L.P.,” aimed at investing in high-potential companies of the Middle East, North Africa and Turkey. The fund also may invest in Asian countries such as China, India and Pakistan, wherein it may find strong cross linkage with businesses in the Middle East.
Omar M. El-Quqa, executive vice president at Global, said that the launch had been inspired by Global’s experience in making private equity investments, its regional relationships and its knowledge and understanding of the market, in addition to the significant untapped buyout potential in the region. “We are currently managing over $1 billion of private equity funds and have strong relations with investor groups in the region. And we are physically present in many of the target countries through our offices in the Middle East, North Africa and Asia.”
“Regional businesses are enjoying strong momentum,” he added, “driven especially by growing M&A activity.” This appealing investment environment is further supported by the fact that “the companies in the region, traditionally owned by the state or families, have become increasingly receptive to new investors including private equity funds.”
He affirmed that there are several other factors that have led Global to launch the Buyout Fund at this time. “The region’s exchanges have undergone major correction, which has rationalized valuations of most listed, as well as unlisted, private companies. The companies from the region are increasingly looking for cross-border acquisitions and business development synergies with international players. Significant reforms are being carried out in the regional capital markets, with conscious effort by the governments to encourage private entrepreneurship.”
Shailesh Dash, senior vice president and head of Private Equity Funds at Global, emphasized that the Global Buyout Fund will look at opportunities to invest in portfolio companies with the objective of participating in or influencing management decisions and thereby enhancing the value of such companies. He believed that there are many companies in the region which can have significant opportunity when properly managed for financial or business restructuring, operating efficiencies or revenue growth.
Dash also noted that “the fund has been endorsed by Bear Stearns International and JP Morgan Cazenove, who are also distributing the same among institutions in Asia, Europe and North America.”
Global has one of the largest private equity team in the MENA region. The team is organized into transaction, due diligence and investment follow-up subgroups. The members of Global’s private equity team have diverse sector and geographic experience in countries across the MENA region and South Asia, and collectively maintain a broad network of institutional relationships within the regions targeted for investment by the Buyout Fund. Additionally, Global’s long financial research capabilities and extensive due diligence process will definitely come into play.
The private equity team has successfully completed 35 transactions and committed over $700 million within a span of 16 months for the two Global Opportunistic Funds in the GCC region, the MENA region (including Turkey), India and China.
“Since the corrections seen in the regional stock markets during 2006, the Buyout Fund will allow investors to diversify their portfolios into this alternative asset class and reduce their overall risk while increasing return on investments,” Dash noted. Dash further said the fund would give investors an opportunity to benefit from Middle Eastern private equity investments “which had always remained a closely guarded jewel.”
Global Capital Partners is one of the largest private equity groups with successful track record of private equity investments across Kuwait, Qatar, Saudi Arabia, UAE, other Middle East, India and China.
Global Investment House also said on Saturday that it has signed an agreement with a major US stockbrokerage firm to trade Kuwaiti shares in Kuwait’s Stock Exchange. Bader Al-Sumait, executive vice-president at Global, said after signing the agreement with Auerbach Grayson & Company, based in New York, US, that “this agreement will position Global in Auerbach Grayson’s worldwide network to be the exclusive execution broker for US-based companies seeking exposure to Kuwait’s Stock Exchange.”
Al-Sumait also said that he is very delighted to sign such an agreement that will attract potential institutional investors to Kuwait and to the region. “The agreement will also empower the strong communication between global markets to open up new opportunities for foreign investors to enter our local market.”
Auerbach Grayson is a stockbroker committed to serving the international needs of major US institutional investors. Through its worldwide network, Auerbach Grayson offers world-wide execution.
David Grayson, co-founder of Auerbach Grayson has signed the agreement yesterday with Al-Sumait to become officially its trading partner in Kuwait, joining a network of more than 100 brokerage companies in Europe, Asia & Pacific, South America, Africa, Middle East and North America.
Grayson said “Global is a reputable firm with quality people, quality products and quality services. In this regard, we are working with Global in order to attain timely and reliable executions in the local equity market.”
“The core of Auerbach Grayson is our global-network concept. We have established partnerships with major foreign banks and brokers — only one exclusive affiliation in each market. Our partners are leading brokers in their markets and members of their local stock exchange.”
He added that “we are delighted to have Global among the leading brokers we work with globally.”
“Through these partnerships, we provide US institutions with advantages we believe no other firm offers. In this case, Global offers research that is second to none in the region.”
The agreement will reinforce the fact that current valuations in the Kuwaiti market are quite appealing for international investors.