Source: Al Bawaba
Etqaan Shari'ah Capital Partners, a private equity joint venture between The National Investor ("TNI") and KIPCO Asset Management Company K.S.C. ("KAMCO"), is today announcing the first close of its Etqaan Shari'ah Fund (the "Fund").
TNI, a leading Abu Dhabi based investment company, and KAMCO, a member of the Kuwait Projects (Holding) Company (KIPCO), one of the region's largest diversified businesses, are seeding the Fund with $20 million, and will continue to fund raise in regional and international markets, subject to country specific regulatory approvals.
The Fund, a first of its kind in the GCC, will invest between $20 million and $40 million in six to eight portfolio companies in the Middle East and North Africa (MENA) region, and will seek to primarily take majority stakes in leading regional businesses. Etqaan Shariah Fund targets companies with sound business fundamentals, facing short-term financial pressures. Investment strategies include primary and secondary buyouts, recapitalisations and other special situations. The Fund's preferred sectors include consumer retail, food processing, healthcare, industrials, transaction processing and services, telecommunications, media and utilities. By focusing on companies with the ability to pay cash dividends, Etqaan Shari'ah Fund aims to provide a dividend yield of up to five per cent (5%). The Fund targets a gross internal rate of return in excess of 30 per cent a year.
Sadoun Ali, Chief Executive Officer of KAMCO said: "We are excited to collaborate with TNI on this much needed product. In the wake of slow equity capital markets activity and a lack of initial public offerings, Etqaan creates a viable secondary market for investment firms to realise exits. We are looking to capitalise on attractive current market valuations and invest through the downturn to generate above average investment returns."
Orhan Osmansoy, Chief Executive of TNI said: "KAMCO brings a unique value proposition to the joint venture. TNI and KAMCO have both achieved long-term historical returns in the top quartile of regional private equity firms through a combination of rigorous investment analysis, partnerships with strong management teams and access to preferred deal flow. As we invest Etqaan, we will adhere to this same approach, helping management teams increase the long-term value of their businesses through strategic advice, acquisitions and financings."
Dewey and LeBoeuf LLP provided legal counsel to TNI and KAMCO during the formation of the Fund. Deutsche Bank (Cayman) Limited will act as the fund administrator.