ADIH targets $300m first close for hospitality fund

The Abu Dhabi fund manager - along with Ithmaar and Gulf Finance - aims to raise $1bn to invest in development projects and hospitality and entertainment companies in Asia and the MENA region.

The Abu Dhabi Investment House (ADIH) is seeking $1 billion for a Sharia compliant private equity fund focused on the hospitability sector in the Middle East, North Africa and Asia.

Countries in the MENA and South Africa region have seen some of the fastest growth in the tourism industry, according to the United Nations World Tourism Organisation.

The Hospitality Development Fund – one of three funds launched in partnership between ADIH, Gulf Finance House and Ithmaar Bank – intends to hold a first close on $300 million in December.

Its placement agent, ADIH Investment Placement Team, is approaching institutional investors from the MENA region and Southeast Asia. Gulf Finance House and Ithmaar Bank are its advisors.

“The fund will invest in several hospitality sub-sectors such as airlines, tourism, accommodation, food services and leisure,” Rashad Janahi, an ADIH managing director, said in the statement.

It will also invest in development projects as well as existing hospitality and entertainment companies, according to Janahi.

The fund’s minimum projected internal rate of return is 20 percent, according to the statement.

The Hospitality Development Fund is one of three investment vehicles launched by Vision, a partnership between ADIH, Gulf Finance and Ithmaar. The other two vehicles InfraCapital and AgriCapital are focused on focused on infrastructure and agriculture respectively. InfraCapital is an investment bank while it is unclear how AgriCapital is structured.

ADIH was planning to launch a fund focused on distressed assets, an official told the Khaleej Times in March. The fund will acquire assets, which will likely have a positive performance following the stabilisation of the global economy, the Dubai daily said.

ADIH did not respond to requests for comment at press time.