Kuwait investment bank Global Investment House is more than one-third towards reaching the $1.5 billion (€1 billion) target set for its Global Buyout Fund.
The firm has a held a first close on more than $500 million for the fund, which will make controlling investments with an average length of three years in companies in the Middle East and North Africa, as well as Turkey, China, India and Pakistan.
The vehicle, which will have an Islamic component of $500 million, has a 7-year life, with up to three one-year extensions, and a 15 percent hurdle rate. Global anticipates its portfolio will be comprised of 20 companies, collectively targeting a 20 percent internal rate of return over the life of the fund.
Global Buyout Fund’s limited partners hail from around the world and include sovereign wealth funds, pension funds, family offices and institutional investors.
It has already completed its first investment, in Oman’s publicly listed Al Jazzeera Steel Company, and is in the process of closing three other transactions “that include one of the largest financial services companies in Turkey, a building material company with a strong brand recognition in the MENA and a leading pharmacy chain in the GCC”, Global said in a statement. Once all transactions are complete, the fund will have invested 60 percent of the capital from its first close.
“The private sector in the MENA region has been dominated by family–businesses, which makes it imperative for private equity funds to develop a deep understanding of the local culture and business practices, and also have strong relationships in order to generate proprietary deal flow,” the firm said in a statement. “The fund is well positioned to meet this challenge, as Global has firmly established itself as one of the largest investment companies in the MENA with region-wide presence and strong local partnerships.”
In the past 18 months, Global’s investment professionals have completed more than 40 transactions in excess of $700 million for its previous buyout funds, Global Opportunistic Fund I and Global Opportunistic Fund II.