Global and DIB's fund gets Bahrain nod

Dubai: Global Investment House and Dubai Islamic Bank (DIB) said the Central Bank of Bahrain has approved their $500 million Islamic Buyout Fund.

The fund will give investors access to Sharia-compliant private equity investments.

As seed investors, Global, DIB and Millennium Capital will contribute 13 per cent of the fund's capital. Global will be the investment manager to the Fund, while Millennium will act as investment advisor.

The fund has been set up as a parallel Sharia-compliant investment vehicle to the Global Buyout Fund, a $615 million conventional private equity fund that was closed earlier this year and is managed by Global.

In 2007 the media foundation Terrapinn awarded the fund the title "Fund of the Year" in recognition of Global's role in the development of the regional capital market.

The fund intends to acquire controlling positions together with the existing Global Buyout Fund or independently in Sharia-compliant buyout opportunities in the Middle East and North Africa (including Turkey), South and South East Asia regions.

The fund will target to achieve a net IRR of 20 per cent per annum by investing in portfolio companies where the investment manager and the investment advisor perceive the opportunity to add value through active support of portfolio companies' management and operations. Upon every successful exit from a portfolio company throughout the fund life of seven years, profits will be distributed to investors.

Shailesh Das, head of alternative investments at Global, said: "Global has a strong track record in private equity investments while Dubai Islamic Bank and Millennium Capital are pioneers in Islamic finance and bring in-depth expertise in structuring and executing Sharia-compliant transactions."

Vast network

"The seed investors combine a vast regional and international network of institutional and high net worth investors and have access to a continuous flow of deals through their existing relationships, which is vital to realise and exceed investors' return expectations on a risk-adjusted basis."

Omar Masrur, head of private equity at Millennium Capital, said: "In addition to Global's deal execution capability, the fund will have access to DIB's extensive network of medium to large-sized businesses and affiliates as an additional source of Sharia-compliant deal flow. We believe the Islamic Buyout Fund is a unique programme for private equity investors in the region to benefit from the complementary strengths of two of Mena's best names, Global and DIB."

Global currently manages more than $2.2 billion invested in alternative assets.