The Dubai-based bank, which has previously specialised in technology and healthcare investments, is launching the $250m Arabia Invest Fund to acquire stakes in companies across a range of sectors.
It will target family businesses and underperforming divisions of regional conglomerates. The fund, which will have a lifespan of seven years, will consider private companies it can take to the public markets and listed companies it can take into private ownership.
“Conglomerates and family businesses over the years have invested in so many things and have companies in various industries,” says Rami Bazzi, principal fund manager at Injazat Capital. “A lot of these businesses underperform.”
The fund will have to overcome a traditional reluctance among local firms to sell subsidiaries, as they believe it implies a failure of those businesses. However, Bazzi says attitudes are changing.
“Family-business owners realise it is not about what a sale indicates,” says Bazzi. “It is about managing their business and getting returns.”
The bank is hoping to raise a further $100m for its second fund targeting technology investments. The fund will last for six years and invest across the region, particularly North Africa. “In early-stage and venture-capital investments, it makes more sense to take a majority stake,” says Bazzi.
Injazat’s first technology fund was set up in 2001, raising $50m, with a lifespan of seven years. It now has just three investments, two of which will be sold off by mid-2008.
Injazat says it is also close to finalising three deals made through its $100m Shefa Healthcare Fund, which targets investments in regional healthcare providers.