Strong Interest in Arabic PE Firm Shuaa

Shuaa Partners has completed a first close of $160 million for its Shuaa Partners I LP. The firm anticipates a final close on the private equity fund in August.

Shuaa is a wholly owned subsidiary of Shuaa Capital, one of the best-known investment banks in the Middle East.

Co-founder and Managing Director Abe Saad says that the firm had intended to raise only $150 million. But after three months of fund-raising, the firm easily passed that goal and extended the limit to $200 million.

Shuaa will be a control investor, seeking to place between $5 million to $50 million in six to eight portfolio companies that are reasonably mature.

Ideally, Saad says, investments will be in private companies that his firm can guide to an IPO. Among the industries it will target are oil and petroleum, education, travel, manufacturing and retail.

The firm has made its first investment from the fund, acquiring a 10% equity stake in one of the world’s most prestigious jewelry retailers, Damas, which operates more than 40 outlets worldwide.

Saad says he believes most of the deals will be leveraged buyouts, but he left the door open for other kinds of PE deals outside of venture capital. Saad says that the Damas deal is typical of the kinds of investments he hopes to continue to make – a strong family-owned business that’s looking to grow.

Saad and Shuaa are a refreshing addition to the normally tight-lipped world of Middle East finance. Ask most U.S. private equity firms about their Arab-backers and they take to studying their shoes. Saad, on the other hand, is one of the few willing to name his LP, Shuaa Capital.

Saad says that Shuaa had been managing $55 million in private funds at MenaVest during recent years, but wanted to expand its work in private equity. Saad, who was born in Beirut, Lebanon, began forming Shuaa Partners in March.

Given that there are only two other prominent Arabic private equity firms, Abraaj Capital and HSBC Private Equity, Shuaa should have no trouble competing for deal flow in its announced geographies: the six Gulf Corporate Council States, Egypt, Lebanon and Jordan.

Saad, who holds multiple graduate degrees from MIT, is a veteran of Oracle, Booz Allen Hamilton, The Carlyle Group and Capital Guidance Group, a billion-dollar Washington, D.C.-based family fund management firm.