PRINCE Nawaf bin Abdul-Aziz Al Saud and three financiers are setting up a Bahrain-based investment bank whose main business will be buying into companies in the Asia-Pacific region.
First Gulf Pacific Bank (FGPB) will initially be capitalised at $100 million. ‘It’s going to be essentially a global M&A (mergers and acquisitions) house. It won’t be doing brokerage or trading,’ says the bank’s chief executive Asad Jamal.
FGPB intends to perform a similar role in Asia to that played in Europe and the US by Investcorp, a highly successful investment bank also based in Manama. ‘The feeling has been with our principal investors that in the Middle East there are no institutions covering the Asia-Pacific region for private equity and direct investment,’ Jamal says. The new bank also plans to be active in North America.
Prince Nawaf, a former minister of finance in Saudi Arabia, is also the uncle of the high-profile Saudi businessman Prince Alwaleed Bin Talal Bin Abdul-Aziz Al Saud. The other three founders of the bank are veteran Canadian investor Samuel Belzberg, Chinese-Canadian investor Robert Lee and Geoffrey Lau, whose family have extensive business interests in eastern Asia. They will head bank offices in New York, Vancouver and Hong Kong respectively, each bringing around five of their own staff to man the offices.
In North America, FGPB will concentrate on friendly corporate buyouts. In Asia, it will buy minority stakes in private companies prior to their going public, co-sponsor infrastructure projects and do a small amount of venture capital business.
Jamal himself, who will run the Bahrain head office with about 20 staff, was previously the Middle East chief executive of the Hong Kong-based Peregrine Group. Peregrine had planned to set up a $100 million investment bank in Bahrain, but scrapped the idea in late 1995. Jamal then resigned from the firm, taking several staff members with him to work in the new bank (MEED 2:2:96).
The founders have contributed a total of $20 million to the bank’s capital. The bank has got permission from the Bahraini authorities to carry out an initial public offering on the Manama stock exchange, which Jamal says may be used to raise $20 million-$25 million. The rest will be raised in a private placement with selected institutions and individual investors, initially in the Gulf and later in other parts of the Arab world. A small portion of equity will also be placed through the bank’s non-Arab founders.
The intention is that the bank will take a couple of years to establish a track record with Middle Eastern money, then start to raise funds on the global markets.
‘In two to three years you might have an equity capital of $300 million-$500 million which would be globally raised,’ Jamal says.