Abu Dhabi Capital Management (ADCM), an UAE investment manager, will be listing one of its funds on the London Stock Exchange’s Alternative Investment Market (AIM) by the end of February this year.
The fund, called Qannas, will focus on investing in undervalued GCC assets. ADCM hopes the first round of listing of ordinary shares will raise $50m. This will be followed by subsequent capital raises from further listings on AIM to a maximum of $200m.
“We chose AIM because the London Stock Exchange is known for its transparency, credibility and governance and we are trying to make Qannas as credible as possible,” says Jassim Alseddiqi, chief executive officer at ADCM.
The managers will retain 6.6 per cent of the issue share capital. There is no specific time frame in mind for the subsequent capital raises, but Alseddiqi expects the company to raise the $200m by the end of the year.
“We are only taking $50m from investors and will then go to market again as opportunities arise. We do not want to take $200m and then sit on it,” says Alseddiqi.
About 80 per cent of the capital raised will be invested in GCC assets, with 20 per cent going toward opportunities outside the region. ADCM already has several investments lined up in the financial services, real estate, oil and gas and tourism sectors.
“We believe this is an under-invested region with strong credentials, including strong economic growth rates and a wealth of natural resources. GCC countries hold 35 per cent of the world’s known oil reserves and 22 per cent of global gas reserves,” says Chris Ward, chairman of Qannas.
Qannas will seek to generate a target investment rate of return (IRR) of at least 20 per cent from these investments.
“We are looking at private equity investments and debt investments and companies that are in need of liquidity. The vehicle will not focus on one country, but since it is headquartered in the UAE, most of the deployment will be in the UAE. The Arab Spring has created opportunities for vehicles such as Qannas and you see a lot of companies in the region trading at massive discounts,” says Alseddiqi.
Qannas’ investments will be held for three to five years. The newly-listed company will be incorporated in Jersey and will be regulated by the Jersey Financial Services Commission.