Dubai-based private equity firm
Abraaj, which manages about $5 billion in assets, announced recently that it raised nearly $3 billion for a new buyout fund. The firm focuses on health care, education, agribusiness, transportation and logistics.
“Our pipeline is comfortably over $2 billion, although not all deals may be completed,” said Executive Director Tom Speechley, who was speaking at the Reuters Middle East Investment Summit. “We are currently in a period where sellers are being forced to adjust expectations and 2009 looks to be promising,” he said.
In 2008, Abraaj made a slew of investments ranging from stakes in a Pakistani energy firm to an Egyptian medical services firm.
Among its recent investments, the firm bought a stake in low-cost airline Air Arabia, and it bought a controlling stake in the parent company of Karachi Electric Supply Co.
Speechley said that he is seeing increasing interest from the international investment community.
“We had one of the largest pension funds in our office a few days ago,” said Fred Sicre, also an executive director at Abraaj.
Speechley dismissed reports late last year that it planned an IPO.
“We never had an IPO on the cards, it was media speculation. We still don’t have plans to do an IPO yet,” he said.
The Gulf Venture Capital Association estimates there were $25 billion in private equity funds invested in the Gulf last year, up from roughly $21 billion in 2006.
The Abraaj executives said the regional private equity industry has suffered from too much hype and there were probably more companies in the field than justified by the amount of business.
“There’ll be a slowdown in the number (of new firms),” said Sicre. “There is a certain amount of hyperbole within the industry.” —Reuters