JEDDAH, 12 March 2007 — A major Gulf investment company has focused itself on Saudi Arabia’s booming economy, in addition to its sustained interests in the Middle East and North Africa (MENA) region.
“Aside from the Kingdom’s construction sector, with SR3 trillion worth of projects planned in the next five years which we are closely monitoring for our investment, we are also considering investments in companies in the oil and gas, water and telecom sectors,” Karim El-Solh, CEO, Gulf Capital, told Arab News in an interview at the Jeddah Hilton.
“While we already have investments in companies involved in these sectors, we’ll be looking forward to increasing them and also considering four other key sectors — construction, health care, education and logistics that are growing rapidly — for our future investments,” El Solh said, who has over 14 years experience in investment banking, private equity and asset management.
Gulf Capital Private Joint Stock Company, incorporated in Abu Dhabi in May 2006, has 300 regional shareholders, 40 of them Saudis.
“The total equity capital raised was AED1.225 billion ($330 million) from 300 regional shareholders,” he said. Sixty percent of it is subscribed by UAE institutional and individual investors and the remaining 40 percent by other regional shareholders. Gulf Capital’s private share offering was more than five times oversubscribed, a rare feat for a private placement, thus highlighting “the firm’s unique positioning and solid business model.”
Gulf Capital was set up with a clear focus: To launch the most dynamic and sophisticated investment firm focused on investing in the GCC and MENA regions. This ambitious goal is backed by one of the largest equity capital bases in the industry, a diversified shareholding representing some of the most prestigious and sophisticated investors in the region, a ground-breaking industry advisory board and a team of seasoned professionals. In parallel to the core business focus of private equity, a real estate team has been developed to source, study, manage, invest in and to create real estate opportunities and developments, spanning from residential to commercial and office prospects throughout the regions.
This is a core business line that Gulf Capital is keen to develop and grow due to its solidity and attractiveness in today’s booming economies. Real estate markets in the region are young and opportunistic, yielding strong financial returns. “The strength of the firm lies in its diversified regional shareholding. It has gone to great length to bring some of the most reputable investors in Saudi Arabia, the UAE, Kuwait, Bahrain, Qatar and Oman. In essence, we are seeing here the rise of one of the first truly pan-GCC investment companies,” El Solh added.
“On the private equity side, the company’s strategy is to acquire controlling stakes in highly profitable and fast growing companies in select industries throughout the Gulf region, and through active ownership accelerate their growth rates and enhance their profit margin with a view to exiting them profitably in the future,” he said. Gulf Capital’s investment objective is to achieve above-average capital appreciation by generating long-term returns to shareholders superior to alternative methods of investing. “As a hands-on investor, Gulf Capital is committed to adding value to its portfolio companies prior to exits. In this approach, Gulf Capital is emulating the best-in-class practice of the leading global private equity players,” he added.
“The strength of our team is not only in securing transactions but also in structuring and executing successful exits for our investments. Gulf Capital’s team has executed more IPOs than any other institution and has developed a unique expertise in successfully realizing investments. This is key for our investors, as what matters most to them are the exits and the return on investments,” El Solh said.
“We keep improving our track record with buying stakes in companies or merging them with others with a clear focus on profitability,” he said, adding that Gulf Capital acquired, as part of a large investment consortium, a 21 percent stake in Maritime Industrial Services Co., a regional leader in the oil and gas construction and services industry. Likewise, it has acquired stakes in a Saudi-based telecom company. It has also acquired a 60 percent stake in Metito, described as the largest Arab water utility that has built 4,000 water desalination plants to date and is currently ranked No. 2 globally in industrial water treatment.
Gulf Capital seeks to provide medium to long-term finance in return of an equity stake in potentially attractive unquoted companies in the GCC-MENA region. It aims to partner with successful companies that have even further potential for success and growth. “Our strategy is to seek sizable stakes in large, profitable and visible companies with leading market share and substantial competitive advantages companies that can be exited at a substantial premium in a short time-frame.
Given the recent large transactions which we are closing, (we closed five transactions in the last eight months), Gulf Capital is increasingly being referred to as one of the most active and dynamic private equity players in the GCC,” he said.
