ecmg AG, a German consulting group focused on the private equity market, has teamed up with Dubai Bank to launch the Islamic Germany Buyout Private Equity Fund.
The two organisations signed a memorandum of understanding in Abu Dhabi, UAE, earlier this month in the presence of both the emirate's crown prince and German chancellor Gerhard Schroeder.
Based on the agreement, ecmg and Dubai Bank will establish and jointly own a management company incorporated in Germany.
The new fund will be used to sponsor leveraged buyouts in the German mid-market. It will be structured to be compliant with Islamic Sharia law, which bans the payment of interest, as well as investments in certain products such as pork or alcohol. The fund is hoping to get a German anchor investor on board before Dubai Bank begins fundraising in the Middle East.
Although the proposed size of and timetable for the fund have yet to be finalised, it is intended to be in excess of $100 million (€134 million) at final close.
Tomas Vrana, a member of ecmg's board, said in an interview with PEO that the fund would allow the firm to approach a new investor base which has shown increasing interest in private equity in the last few years.
Vrana added that the proposal had received enthusiastic support from the German government as it would provide funds for a currently underfinanced sector.
ecmg is an independent corporate finance and private equity consultancy headquartered in Essen, Germany and with offices in London, Prague, Budapest, Abu Dhabi, Dubai, Bombay, Singapore and Sydney. The firm also offers consultancy on tax and legal issues to its clients, which include banks, corporates and private equity funds.