Dubai: Abraaj Capital, a private equity group in the Middle East, established its first office in the West Bank city of Ramallah, their 8th office in the Middle East, North Africa and South Asia region.
Abraaj Capital's $50 million Palestine Growth Capital Fund will be dedicated to investing in Palestinian small and medium enterprises (SMEs). The Palestine Growth Capital Fund is part of Abraaj Capital's $700 million regional SME investment-platform called Riyada Enterprise Development (RED), which was launched earlier this year.
"Opening an office in Ramallah and appointing a country head is part of that initiative. By definition, investing in SMEs is a grass-roots affair and you need people on the ground with local expertise finding and supporting the right investments," Tom Speechley, Executive Director at Abraaj Capital told Gulf News.
Fayez Hussaini, the newly-appointed country manager, will help identify, execute and manage investments in some 20 to 25 Palestinian SMEs over the next four years.
Backed by a dedicated Riyada Enterprise Development team, Hussaini's primary focus will be on SMEs that need capital and institutional support, with a preference for those that can leverage technology and innovation.
"The Palestine Growth Capital Fund will target companies that are already up and running, that are generating profit," Speechley said.
"The Fund itself is sector-agnostic, meaning that it will invest in the best opportunities whatever the sector; health, education, agri-business, construction materials and so on.
Nonetheless, as a general theme the Fund is attracted to companies that can use technology to grow, and companies that can expand their footprint across the region."
The Fund will also be looking to deliver returns in excess of 30 per cent per annum over a period of three to six years.
"The Fund comes at an important time for the Palestinian economy when it is projected to grow by more than 7 per cent this year, and when the Palestinian government is focusing more and more on developing the SME sector," Hussaini said.
"This Fund is exactly what Palestinian entrepreneurs need," he said.
"In addition to providing capital, it offers promising SMEs dedicated back-office and strategic support that will allow them to grow to the next level." While the investment is essentially to make profit, the Fund will also have its share of contributing to the Palestinian economy.
Economist Mohammad Al Asooni told Gulf News that an initiative such as this one made by Abraaj Capital would bring tremendous opportunities for the Palestinian people.
"There's a huge unemployment rate because there are no projects going on there," he said. "There are definitely opportunities in Palestine especially since the European Union has recently announced its decision to support it."
Other initiatives, regardless of how small, are much needed, he said.
Abraaj Capital and the Palestine Investment Fund are co-sponsors of the Palestine Growth Capital Fund, with a combined commitment of $15 million.
