Abraaj completes first Pakistan deal

Abraaj Capital, the Dubai-based private equity firm, has made its first investment in Pakistan with the acquisition of a 50 percent stake in BMA Capital Management.

Dubai’s Abraaj Capital has invested AED25.7 million (€5.7 million; $7.0 million) in BMA Capital Management, the Pakistani financial securities sector adviser and manager, which is a member of the Karachi Stock Exchange.

Abraaj invested from its Abraaj Buyout Fund, which closed in June 2003 with $116 million of commitments.

BMA offers brokerage and financial advisory services to Pakistani and international clients and has acted as domestic adviser or manager in some of the country’s most significant privatisations, such as the AED3.3 billion global depositary receipts (GDR) issue by Pakistan Telecommunications Company and the AED5.9 billion privatisation of Kot Addu Thermal Power Plant.

Arif Naqvi, chief executive and vice chairman of Abraaj, said the capital expansion investment would enable BMA to offer its clients a broader range of financial services including retail brokerage, asset management and private equity.

Commenting on the rationale for the deal, Abraaj executive director and chief financial officer Simon Davies said: “Despite variations in political stability and fluctuations in the equity markets of Pakistan, for the five years ending June 2003 the company witnessed a compound annual growth rate of 12 percent in revenue. With the implementation of the newly formulated business plan, we expect BMA to grow into a solid financial house whose integrated services outstrip competition.”

Abraaj specialises in private equity investments in the Middle East, North Africa and South Asia. The firm recently launched a real estate fund, which aims to raise $100 million for investment in real estate opportunities primarily in the Middle East, as well as in South Asia and Western Europe.