Three of the original founders of First Gulf Pacific Bank, a new bank intended to emulate Investcorp by investing Gulf Arab funds in Asia, have ended their involvement with it. Sources close to the bank, which is being established in Bahrain, say it will probably go ahead with new shareholders.
‘Mr [Samuel] Belzberg, Mr [Geoffrey] Lau and Mr [Robert] Lee are no longer involved with the bank,’ says a well-placed source, referring to the three international investors who originally planned to set up the bank in partnership with Prince Nawaf Bin Abdul-Aziz al-Saud of Saudi Arabia. The founders were to inject a total of $20 million into the capital of the bank, which would then raise its capital to $100 million through a private share placement. By late last year, Arab investors had made equity commitments of $200 million. ‘It’s been in limbo since January. It wasn’t a dramatic parting of the ways, more a realisation that the group wasn’t sharing the same objectives,’ says the source. It was not immediately clear what the issues were that had prompted the three investors to drop out of the project.
MEED understands that new shareholders, some of them from Saudi Arabia, are being found in addition to Prince Nawaf, and that Asad Jamal, the investment banker who was to head First Gulf Pacific Bank, is still involved. The Bahrain Monetary Agency (BMA) granted the new bank a licence last year. ‘They haven’t finished registration yet,’ says a BMA official. ‘They said about two months ago that they will change the structure of the shareholding and come back to us.’
The significance of the three investors’ departure from the project is that they and their respective employees, based in Vancouver, New York and Hong Kong, would have obtained business for the bank in corporate finance, asset management and direct investment. Belzberg was to focus on North America and Lau and Lee on the Asia-Pacific countries. There is definitely an appetite among Gulf Arab investors for investment opportunities in Asia – a private placement for a similar institution, First Islamic Investment Bank (FIIB), has been heavily oversubscribed. However, FIIB already has a subsidiary in Malaysia with a track record of deals in that country (MEED 20:6:97).
Jamal came up with the idea of a niche investment bank investing Gulf money in the Asia-Pacific region and North America while he was head of Middle East operations for Peregrine Investment Holdings, the Hong Kong investment group. MEED understands that Peregrine turned down the idea for fear that the new bank would compete for deals with its own operations in Asia. Jamal left Peregrine, which closed its Bahrain office at the start of this year as part of an internal reorganisation (MEED 31:1:97).