Invest AD targets $400m for second MENA fund

The rebranded firm, formerly the Abu Dhabi Investment Company, aims to raise a fund more than triple the size of its predecessor.

Invest AD, the Middle East investment firm formerly known as the Abu Dhabi Investment Company (ADIC), has launched its second private equity fund.

Invest AD MENA Partners 2 intends to raise $400 million and has seen strong interest from institutional investors and large investor groups in Asia as well as Middle Eastern investors, Samir Assaad, Invest AD’s head of private equity, said in an interview with sister news site PEI Asia.

The fund is aiming for a first close on between $200 million and $250 million by the first half of 2010 and a final close shortly thereafter, said Assaad.

It will make growth and expansion capital investments in the Middle East and North Africa (MENA) region, primarily in Egypt, Saudi Arabia, the UAE and Turkey.

The fund will invest between $25 million and $75 million in companies that have an enterprise value of between $50 million and $500 million. Although the fund is sector-agnostic, the firm is interested in sectors such as logistics warehousing, transporation, healthcare, fast moving consumer goods and pharmaceuticals. Not more than one-fifth of the fund will be allocated to one investment, said Assaad.

Despite the challenging fundraising environment, Assaad believes there are currently attractive valuations available those are able to raise and deploy capital. “Valuations in the MENA region are at a 20 percent to 25 percent discount,” he added.

Invest AD MENA Partners 2’s predecessor fund, ADIC MENA Partners, which was originally targeting $500 million, closed on $120 million early this year. The firm decided to put off fundraising and close the fund in light of the financial crisis at the time. The fund is fully invested in two companies: telecom support company OrasInvest and specialty beverage distributor Unitra METS Group.

Invest AD has seen a management reshuffle as it builds up its third party fund management business and moves away from its original model with the Abu Dhabi government as the firm’s sole financial sponsor. This March, it appointed Assaad to “lead a charge for buyouts” in the MENA region as well as its first chief financial officer Anders Ljungqvist to look after its proprietary investments.

A month later, the firm appointed of Alex Carré de Malberg, a former managing director at investment bank Rothschild, to lead a new independent advisory arm concentrating on mergers and acquisitions and capital-raising.