New MBO eyes region

10 February 2006

Capital Trust Middle East (CTME) has split off from its London-based parent company Capital Trust Group (CTG) through a management buy-out (MBO). The new company, which has a capital of $10 million and $70 million under management, will be called Corporate Finance House (CFH).

CFH has acquired all of CTME's real estate assets, including a representative office in Beirut. It plans to open an office in the GCC where 90 per cent of its customers, who are mostly high net worth individuals, are based.

CTME specialised in real estate and the new company will continue to offer investment services across the Middle East and North Africa, including mergers and acquisition, financial restructuring, private placement and private equity services, as well as real estate funds.

CTG will continue its private equity and investment banking activities in the region. Its EuroMena Fund closed on 1 February at $60 million, which is expected to rise to $90 million-100 million at its second closing in the first quarter of 2006. The European Investment Bank (EIB) has a $12 million stake in the fund, in which CTG has invested more than $10 million, and regional institutional and high net worth individual investors and European institutions have subscribed.

The fund will invest in at least three sectors, including financial services and education in Lebanon, Syria, Jordan, the Occupied Territories, Egypt, Tunisia, Algeria and Morocco, but will not invest in turnarounds, start-ups or industries prohibited by the EIB, such as tobacco and gambling.

CTG is also a founding shareholder in Saudi Arabia-based Forsa Investments. The company is under formation and will offer investment services in the kingdom.

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