BNP plans $300m Mideast equity fund

Manama: French bank BNP Paribas yesterday said it is launching a $300 million private equity fund targeting mid-cap companies in the Middle East to benefit from lower valuations due to the global crisis.

"Things were expensive a year ago, (now) expectations are lowered, people are not as high as they were, they're more sober, more constrained," Tariq Al Samahiji, chief executive for the Middle East and North Africa at BNP Paribas Investment Partners, told Reuters.

He said the bank targets annual returns of 18-19 percent for the fund, some 70 percent of which will be invested in the Gulf Arab region, with the remainder in North Africa. The bank itself will invest $75 million in the fund, which it plans to fully invest over the next three to four years.

The Gulf has started to feel the global financial woes through tighter liquidity at banks, and its economies are expected to now grow at slower rates than during the past years' boom.

Health care and education, sectors which in the region have lacked private sector investments, are ranking high on the target list of the fund, Samahiji said.

Things were expensive a year ago, (now) expectations are lowered, people are ... more constrained."