NBK Capital, the investment and merchant banking subsidiary of the National Bank of Kuwait, has acquired an undisclosed stake in Kuwait-based Zak Solutions, an IT solutions provider.
Zak Solutions distributes telecommunication and IT products such as computer accessories, telecommunications networks and security systems. Its partners include Microsoft, Dell and Cisco.
The investment was made out of NBK Capital’s $125 million Kuwait Investment Opportunities Fund. Approved by the National Offset Company, the fund is a vehicle that allows foreign contractors operating in Kuwait to fulfil their “offset obligations”.
The offset programme stipulates that any foreign entity which wants to procure a contract in Kuwait is required by the government to invest 35 percent of the monetary value of the contract somewhere else in the country, either directly or indirectly.
By investing in Kuwait Investment Opportunities Fund, foreign contractors pass the burden of fulfilling their investment obligations to NBK, which then identifies, operates and exits investments on their behalf.
The fund pools the obligations of the contractors and invests them in high-growth sectors such as education, healthcare, manufacturing and technology, in Kuwait.
NBK Capital also manages the $250 million NBK Capital Equity Partners Fund as well as the $200 million NBK Capital-GSC Group Mezzanine Fund. The firm has offices in Kuwait, Istanbul and Dubai.