Private equity firm Abu Dhabi Capital Management (ADCM) has invested 43 per cent of its first round funding of $46m in secondary private equity funds in the Middle East & North Africa (Mena) region, the US and Europe.
“We hope to deploy the remaining amount within the next 12-18 months, but it depends on the opportunities,” says Jassim Alseddiqi chief executive of ADCM.
About 80 per cent of the amount has been focused on buying existing private equity funds in the Mena region particularly in Saudi Arabia, UAE, Egypt and Turkey, bought at a discount from distressed investors. It is the first of its kind in the region.
The first round was launched in March 2011 and closed on 3 July, raising money from institutions in the region and high net-worth individuals in the GCC, mainly the UAE, Qatar and Saudi Arabia.
ADCM is expecting 20 per cent gross internal rate of return (IRR) and to double investment in five years’ time. The firm is planning to distribute large portions of investor money within the next 12-months.
The second round of funding aims to raise $100m and will follow a different strategy, but some of it will still be invested in secondary private equity funds.
“The secondary private equity space is a very lucrative strategy at the moment in the region. Sentiment is picking up, but investors are becoming selective and more thorough about management of funds,” says Alseddiqi.