New private equity firm formed for the pre-IPO business

21 October 2005
The UAE's Economy & Commerce Ministry has granted initial approval for the establishment of Gulf Capital, a new AED 500 million ($136.2 million) private equity firm based in Abu Dhabi and aiming to do pre-initial public offering (IPO) business across the GCC. The chief executive officer is Karim el-Solh, former head of The National Investor (TNI).

Sixty per cent of Gulf Capital's equity is being raised from UAE investors and the remainder from elsewhere in the region. The GCC placement has been completed. 'We had massive oversubscription and all our shareholders are sophisticated investors, including large institutions and royal family members,' El-Solh told MEED on 9 October. 'Now we will start raising the UAE tranche. Investments will similarly be spread across the region - we don't want all our eggs in one basket. Already we are working on a pre-IPO deal in Saudi Arabia.'

Gulf Capital is planning a diversified investment profile, ranging across eight sectors - oil and gas, power, financial services, logistics, telecoms, construction, manufacturing and education.

'Our vision is to invest AED 100 million [$27.2 million] in each of five-to-six private companies and take a very hands-on role, restructuring them and improving management to prepare them for public sale or possibly sale to another private company, arranging the deal in-house,' says El-Solh. 'The typical investment horizon will be one-to-three years.'

Private equity is growing in popularity in the Gulf. The Central Bank of the UAE in early September approved the establishment of Abu Dhabi Investment House to focus on private equity among other activities and several GCC institutions have recently launched pre-IPO investment funds (MEED 9:9:05).

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