Healthcare fund prepares to close

12 May 2006
Saudi Health Investment Company (SHIC) is to invest $37.5 million in Dubai-based Injazat Capital's $100 million Shefa Healthcare Fund. The fund has also recently signed an agreement with the local Al-Mashafi Group of Hospitals to acquire a majority stake in two of the group's nine facilities in return for stock.

The Shefa Healthcare Fund plans to establish a network of 16 hospitals across the Middle East and North Africa (MENA) region, focusing on Saudi Arabia, the UAE, Jordan, Lebanon, Egypt and Tunisia. The fund will take majority stakes with a maximum equity investment of $10 million and has signed memorandums of understanding (MoUs) with six partners. 'Healthcare is fragmented in the Middle East,' said Shefa Healthcare Fund principal fund manager Fawzi Zeine. 'There aren't big institutions only standalone hospitals. When you establish a network of hospitals, you get better pricing for procurement and reduced operational costs.'

Five investors have subscribed to the fund, which is expected to close by mid-May. 'The model is to separate assets from operations,' said Zeine. 'The idea is to sell off the land and buildings, or securitise it, and re-invest in operations.' The fund is considering other investments, including ambulance services, clinics and laboratories.

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