Dubai: MerchantBridge, a private equity company focused on the Middle East, and UBS Global Asset Management yesterday announced the launch of a 50:50 joint venture called MerchantBridge-UBS Private Equity.
The new company based in Dubai plans to invest $500 million in private equity investments in the region. "Our strategy will be to acquire either majority stakes or significant minority stakes in target companies and help them add value for our investors," said Basil Al Rahim, CEO of MerchantBridge-UBS Private Equity.
In addition to a seed capital of $80 million that received equal contributions from both parties to the venture, the new entity will raise $500 million through a private equity fund that will be placed with international investors.
Three-year horizon
With the regional equity valuation at their historic lows, price expectations of potential sellers of private equity too have come down.
"We are a medium to long-term player and expect not to be impacted by the current market volatility," he said.
While the new fund will start placements in early next year, the company expects to complete the investment within a horizon of three years.
The new firm's strategy will be essentially opportunistic with a broad focus on direct investments in sectors such as oil and gas services, financial services, and light and medium industries.
The company expects the global reach of UBS Global Asset Management to help it in placing the funds with international institutional investors while the local and regional knowledge of MerchantBridge will help it identify suitable assets in the region."
Track record
"The new joint venture combines our global resources and direct investment experience with MerchantBridge's local knowledge and private equity track record," said John Fraser, chairman and CEO of UBS Global Asset Management and also chairman of UBS Saudi Arabia.
