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Dubai groups to co-launch $5bn in private equity funds

Dubai Islamic Bank and Dubai World are establishing a $5bn group of Dubai-based private equity funds, to invest in strategic sectors within the Middle East, Asia and Africa.

Dubai Islamic Bank and Dubai World – the holding company of global port operator Dubai Ports World and other locally-based investment groups – have announced their intention to launch a $5 billion (€4.07 billion) “family” of seven private equity funds over the next 18 months.

The funds will each target a specific strategic sector, including energy, financial institutions, infrastructure, real estate, health and education, general industrials and technology, media & telecommunications (TMT). Each fund is to be managed by a team of private equity and industry experts.

A press release stated that Dubai Islamic Bank and Dubai World would provide seed capital for each fund, to be joined by “blue chip institutions from the Middle East and beyond”. Investors are to initially provide 30 percent of the commitments for each fund, with future draw downs from investors to take place on an as-needed basis.

According to Izzet Güney, managing partner of Dubai-based Millennium Private Equity, the TMT fund is anticipated to close soon, with the other sector-focused funds to be set up thereafter. Güney was most recently director of the Telecommunications, Informatics and Media Team at the European Bank for Reconstruction and Development.

Dr Mohammad Khalfan Bin Kharbash, UAE Minister of State for Finance and Industry and chairman of Dubai Islamic Bank was quoted in the press release as stating that the TMT fund will focus on investment opportunities in the Middle East, Asia and Africa; the energy fund will target Asia and the financial institutions fund will invest in Islamic banking growth and consolidation opportunities around the world.