Dubai: Gulf Capital, the UAE based diversified alternative asset manager on Sunday announced the closing of its third private equity fund, GC Equity Partners Fund III (Fund III), at $750 million (Dh2.76 billion).
The buy-out fund, focused primarily on the GCC, is the largest raised by Gulf Capital to date and the largest private equity fund raising effort in the Middle East over the last three years.
The investors in GC Equity Partners Fund III include a significant number of regional and international limited partners, comprising of sovereign wealth funds, pension funds, endowments, funds of funds, insurance companies, family offices and other institutional investors.
“The huge demand for our third fund is recognition to the performance of our previous funds and the return of investor confidence to regional private equity industry,” said Dr Karim Al Solh, Chief Executive Officer and Managing Partner, Private Equity, at Gulf Capital.
Gulf Capital’s previous fund, the $533 million GC Equity Partners Fund II which closed in early 2010 delivered more than 25 per cent compounded average internal rate of return (IRR). While a significant number of investors in the Fund III are repeat investors from Fund II.
In the new fund, close to 60 per cent of external investors are from the US, Europe and the Far East, highlighting the appeal of the GCC asset classes to global investors.
The final closing of Fund III brings Gulf Capital’s total assets under management to over $3.3 billion (over Dh12 billion) across its four business units, private equity, credit and mezzanine, real estate development and principal investments.
Calculated exposure
Gulf Capital officials said regional and global investors are returning to regional private equity opportunities and are attracted to proven strategies and asset classes. “These sophisticated institutional investors, be they international or regional, want calculated exposure to the region through investing in the leading private equity platform in the GCC,” said Muhannad Qubbaj, Managing Director, Private Equity at Gulf Capital.
While global and regional limited partners (LPs) are keen on exposure to GCC asset classes, private equity industry is expected to face completion form the highly liquid banking sector and the strong revival in both debt and equity capital markets. Many regional firms that would have sought private equity funding now have financing options through capital market and bank market.
Despite the strong liquidity and alternative funding options, Qubbaj said there are a large number of acquisition opportunities in the Gulf region and a number of global LPs are keen on co-investment in these opportunities.
Ahead of the closing of its latest fund, Gulf Capital had successful exits from its previous funds, including the partial trade sale of a strategic stake in Metito Holdings to Mitsubishi Corporation and Mitsubishi Heavy Industries and a partial exit of Gulf Marine Services through an initial public offering on London Stock Exchange.
While Gulf Capital is poised to invest its Fund III in 10 to 12 regional acquisitions, Dr Al Solh said the company is in constant look out for attractive funding opportunities ranging from revolving credit facilities to capital market opportunities.
