Gulf Capital signs increased AED850m revolver

The Middle East-focused alternative investment firm will leverage its own fund commitments with the credit line

Abu Dhabi-based Gulf Capital has signed an AED850 million (€203 million; $231 million) six-year revolving credit facility with two UAE-based lenders, the investment firm announced. The facility will be used to leverage up its own commitments to each of its funds, Gulf Capital chief executive Dr Karim El Solh explained to PEI sister title Private Debt Investor.

The revolver increases the firm’s previous credit line by AED350 million (€83 million; $95 million), from AED500 million (€119 million; $136 million). The new deal also cuts the interest rate paid by the firm, El Solh added.

Abu Dhabi Commercial Bank was initial mandated lead arranger on the new revolver while First Gulf Bank joined as mandated lead arranger.

“Gulf Capital is entering 2015 extremely well-funded both at the corporate and fund levels and is evaluating numerous investment and growth opportunities across the region. We believe there is a unique window today to secure attractive investments at reasonable valuations in high growth sectors across the GCC,” said El Solh in the statement.

Gulf financing markets became increasingly competitive over the course of 2014, as liquidity from both domestic and international lenders increased, in part driven by international sanctions against Russia.

Though the recent fall in oil prices is negative for some Gulf-based businesses, there are resilient sectors, El Solh told PDI. With some of the fastest growing populations in the world in the region, consumer-related industries are defensive in the current environment, he said, including healthcare, education and leisure. One of the firm’s deals is a $1 billion Al Maryah shopping mall in Abu Dhabi with a hotel tower attached, he said.

The firm is looking to domestic investments, as the UAE has strongly diversified from oil, as well as Saudi Arabia and Egypt.

In Saudi Arabia, the firm has invested in real estate that should deliver attractive rental yields when complete. Government spending plans remain robust and consumer spending will ride out the oil price fall, El Solh said. In Egypt, the population combined with a new, more stable government and a lot of donor money to boost infrastructure spending promise opportunity, he added.

Established in 2006, Gulf Capital manages over $3.3 billion of assets across seven funds and investment vehicles. Gulf Capital invests in private equity, real estate as well as credit and mezzanine opportunities. Last year, it closed its third and largest private equity fund, the $750 million GC Equity Partners III.