Gulf Finance House (GFH), the latest Islamic investment bank to be established in Bahrain, opened for business on 16 October. 'We are going to focus on direct investment, initially in the Gulf though we have an eye on expanding throughout the Middle East,' says chief executive officer Esam Janahi. 'There are opportunities in Egypt, Morocco and Lebanon, but we will build our operations in the GCC.'

The new bank, which will be operating from its offices in the Salam Tower in Manama by the end of the year, has paid-in capital of $65 million. 'We were originally targeting $50 million, but we were heavily oversubscribed so we raised the level,' says Janahi. Nine financial institutions, including Gulf Investment House, Bahrain Islamic Bank, Islamic Development Bank, Kuwait Finance House, Dubai Islamic Bank and Qatar Islamic Bank, have paid in$50 million, with the remaining $15 million coming from private investors (MEED 20:8:99).

'The strong shareholder base of Islamic financial institutions will help our asset management division to grow rapidly,' says Janahi. GFH plans to tailor its investment products to suit the needs of the customers of its institutional shareholders. 'We will have access to a very strong client base,' says Janahi.

GFH is to concentrate on GCC private equity transactions. 'We are already looking closely at some derivatives of infrastructure projects,' says Janahi. 'Deals could come from any number of sectors including healthcare, education or water treatment.' He says the bank plans to take majority positions worth about $25 million-50 million and hold them for two-and- a-half to three years. 'We will exit either through sales to strategic investors, or through initial public offerings,' says Janahi.

He says that the timing of the bank's establishment is significant as there are growing opportunities for investment bank participation in private- sector infrastructure projects. 'Our timing is also good in terms of the development of the region's capital markets,' he says. 'They are deepening and developing rapidly.'

Janahi says that bank is already looking at a number of deals in the UAE, Bahrain and Saudi Arabia, and he expects at least one to be concluded by the end of the year.