US investment company Bonil is planning to set up the First Fund for Partners in Peace with a target capitalisation of $150 million. The closed-end regional fund, which is expected to become operational within four to six months, will invest in a range of infrastructure and development projects in Egypt, Israel, Jordan, Morocco and Gaza and the West Bank.
About $50 million of the fund’s capital will be raised as equity, and the remainder will be raised in the form of debt from the US capital markets. The fund will be registered in the US as a limited company, but may later be listed on the New York stock exchange. The co-ordinating office will be in New York, however most investment strategy will be devolved to regional offices.
Victor Politis, managing director of the New York-based Bonil, says about half the required equity investment has already been committed, mainly from US investors. However, he says there has been strong interest shown by from potential European and Middle Eastern partners. Negotiations are going ahead with two firms in Egypt and Morocco, which are expected to come in with equity participation, as well become advisers for the fund’s regional activity. Politis says he also hopes to bring in a Jordanian partner.
‘As investors, we are looking at opportunities not sectors,’ says Politis. The fund will concentrate on small and medium-size projects in a broad range of areas, including the hotel and leisure industry and manufacturing. The fund aims to leverage its investment by targeting projects that will be eligible for sovereign credits and export-import-type guarantees.