“One of the paradoxes of raising money is that it is very difficult to raise money when the time is exactly right,” says Ahmed Heikal, chairman and chief executive of Cairo-based private equity firm Citadel Capital. “No doubt about it, this is an extremely, extremely difficult time to raise money, which should also tell you something about why it is exactly the right time to be investing.”
Citadel is currently branching out from its traditional business model and raising its first fund with third-party institutional capital.
The firm is targeting a $500 million final close for the Citadel Capital Joint Investment Fund, which, according to online documents from the International Finance Corporation (IFC), will likely make up to 10 investments in industrial consolidations, distressed and turnaround companies, buyouts and selective greenfield companies. The IFC board is currently deciding on a proposed $25 million commitment to the fund.
The fund, for which the firm aims to hold a first close in the second quarter of this year, will continue Citadel's geographic focus on Egypt and MENA countries including Algeria and Libya. Raising a traditional private equity fund, however, is a departure from Citadel's previous investment strategy.
In the past, Citadel deployed its own permanent capital of EGY£2.75 billion (€400 million; $500 million) in its platform investments alongside regional coinvestors. Deals were financed individually through sector-specific or opportunity-specific vehicles. The GP's investments in its deal vehicles has typically been between $30 million and $50 million, with most ranging in equity size from $100 million to $300 million in total, co-founder Hisham El Khazindar told PEI last year.
Citadel changed tack last year and decided to raise its debut institutional fund in order to increase international institutional participation in its investments and to have capital ready to deploy at all times, says Heikal.
The firm has grown exponentially since being founded five years ago by El Khazindar and Heikal, both former senior executives at regional investment bank EFG-Hermes. It has added an office in Algeria and plans to do the same over the next three years in other core countries in which it invests, including Libya and Syria. It has also mulled the prospect of being the first regional private equity firm to publicly list its management company.
DIC SWITCHES MANAGEMENT DUO
Dubai-based investment firm Dubai International Capital has reshuffled the senior management of its private equity division as it shifts its focus from dealmaking to portfolio monitoring amid the current economic crisis. Sylvain Denis and Alan Hyslop are leaving to be replaced by Dubai-based David Smoot, who will take the role of chief executive officer, private equity, and Eric Kump, managing director, who will lead DIC's European private equity operations from London.
GLOBAL SETS KUWAITI BUYOUT RECORD
Global Investment House, the Kuwaitbased investment bank, has acquired a controlling stake in logistics company Jassim Transport & Stevedoring. Financial details of the transaction were not disclosed, but a source close to the situation pegged the deal value at around $150 million. As well as providing a broad variety of logistics services, JTS operates the region's largest fuel distribution operation and counts the US military among its clients. Omar El Quqa, executive vice president at Global Investment House, described the buyout as Kuwait's largest.
SHUAA GOES OFF-MARKET
Shares in SHUAA Capital have stopped trading on the Kuwait Stock Exchange in line with a shareholder decision made in June 2008. The investment bank, which has a number of private equity and real estate funds, had been listed on both the Kuwait and Dubai exchanges, since 1984 and 2000 respectively. The de-listing in Kuwait was in response to regulatory conflicts for dual-listed companies and the firm expects it to boost SHUAA's liquidity and trading volume on the Dubai FinancialMarket.
MEZZANINE JOINT VENTURE TARGETS $200M
The NBK Capital GSC Mezzanine Fund has held a first close on $150 million. A joint venture between NBK Capital, a division of the National Bank of Kuwait, and US alternative asset manager GSC Group, the fund intends to profit from the lack of available debt for private equity deals in the Middle East. NBK is aiming to increase the size of the fund, which will invest in businesses with enterprise values between $10 million and $20 million, to $200 million by the end of the first quarter of 2009.
CARMEL VENTURES PROMOTES TWO
Israeli venture capital firm Carmel Ventures has promoted Ronen Nir, a former director at software company Verint who joined Carmel in 2008, and Itzik Avidor, the firm's chief financial officer since 2000, to partner level. In February 2008, Carmel held a final close on $235million for its third fund, focused on global information technology-related sectors, such as semiconductors and software. The fund attracted commitments from returning investors JPMorgan, the California Public Employees' Retirement System and the Oregon Public Employees Retirement Fund.