Wider economic buoyancy, growing liquidity, the need for portfolio diversification – all have combined to spark interest and development of longer term infrastructure funds for both inward and outward investment.
For the first time GCC-based private equity investors see an opportunity to get involved in both greenfield projects and the secondary trading of assets. Furthermore – the GCC private equity fund base is expanding, the number of funds and volume being raised having trebled in 2006.
The new teams
The basic strategy is for international investors to team up with regional players – giving a local flavour to infrastructure funds. For example, in 2005, Dubai headquartered Emirates National Oil Company (ENOC) teamed up with GIB and Standard Bank to co-sponsor the GCC Energy Fund. Subsequently, Saudi Arabian General Investment Authority (SAGIA) teamed up with Swiss private equity house and investment bank Swicorp to form Swicorp Joussour Company, commonly known as Joussour.
Meanwhile Dubai International Capital, Oasis International Leasing, and HSBC have linked up to form the MENA Infrastructure Fund. And advisors are also setting up specialised units to help private equity access the region. Earlier this year Washington DC based oil & gas advisory firm Taylor DeJongh announced that it was participating in the setting up a new investment bank, First Energy Bank, which will focus on private equity investments in the energy sector.
There is good potential for private equity and infrastructure funds in GCC projects – including greenfield IPP and IWPP projects. "GCC projects are currently very heavily bid, but as the project...
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