A Middle East private equity fund set up by a US fund manager and part-guaranteed by the US’ Overseas Private Investment Corporation (OPIC) hopes to begin investment in the region by next summer, a year after it was launched. The fund is intended to invest in North Africa, Jordan and the Palestinian areas.
‘It has taken longer than we expected, but given the political situation, we’re happy with the response,’ says Mona Aboelnaga of Siguler Guff & Company, which is managing the fund. ‘There’s a lot of interest in North Africa, including Egypt, but Jordan and Palestine are not attracting the same kind of interest [from investors].’
The company has raised commitments of about $120 million from corporate investors, mainly in the US and is currently negotiating with a ‘fairly large’ institution whose contribution could raise the total to $150 million. Initial subscription will then close and investment can get under way, Aboelnaga says. The company had previously hoped to start investing by the end of last year (MEED 20:9:96).
Investor worries about the political situation in the Palestinian areas make it possible that the fund will invest first in Morocco, Tunisia or Egypt, Aboelnaga says. European and Arab investors tend to be more sanguine about political risk, while US investors take more persuading. She says, however, that the company has taken US money managers to visit the area and they have come away persuaded that there are good investments to be