Abu Dhabi’s Invest AD has launched an Iraq Investment Fund to capitalise on its strong future economic growth, estimated at over 7 per cent annually in the next couple of years, according to the International Monetary Fund (IMF).
The new fund, which opened to institutional and high net-worth investors on 3 October, will make investments primarily in listed equities, but also in unlisted opportunities.
Established by the Abu Dhabi government in 1977, Invest AD is seeding the fund and is marketing it alongside its other equities and private equity funds that invest in the Middle East and Africa.
“As Iraq stabilises, it should take its place as one of the major economies in this vibrant region,” says Nazem Fawwaz al-Kudsi, Invest AD chief executive officer.
“The country is overcoming difficult circumstances to make real progress towards an open economy and we see tremendous opportunities in the long term. By entering the market early, we hope to capitalise fully.”
The fund makes Invest AD the first Middle Eastern company, and among a handful of companies in the world, to offer global investors access to Iraqi equities.
Al-Kudsi says the fund was launched in response to growing regional and international investor interest in Iraq.
“They see the growth potential, whether through fixed or portfolio investments,” he says. “The Iraqi equity market is still quite small by regional standards, but from small beginnings come big opportunities. We expect our fund to grow in line with this.”
Iraq’s increased oil production is expected to be the key driver of growth in the coming years.
It has the world’s third-largest proven oil reserves and the country has signed 11 oilfield development deals with major oil firms, including Holland’s Royal Dutch Shell, the US’ Exxon Mobil and South Korea’s Kogas.
These deals are projected to lift the country’s capacity within seven years to just under Saudi Arabian levels of 12 million barrels per day (b/d), from its current 2.5 million b/d.