Private equity arrives in Pakistan

Ijara Capital Partners is the first Pakistani fund to be licensed for operation in the country.

The Securities and Exchange Commission of Pakistan has approved the first Pakistani private equity fund: the $100 million Ijara Capital Partners’ Pakistan Emerging Markets Fund-1.

Ijara has agreed commitments totalling $100 million from five LPs, based in Pakistan, the Middle East and the UK. The firm declined to comment on their identities, saying they were high net worth individuals, Pakistani businesses and banks.

Ijara is the alternative investment arm of Ijara Group, a private equity advisory firm. It is led by Farrukh Ansari, who has run the group since its establishment in 2000.

“We’ve known the investors for the past five years, having worked with them in our private equity advisory business. Their soft commitments range from between $10 million and $60 million, and we expect to do seven to eight deals out of fund one,” Farrukh Ansari, chief executive of Ijara Partners, told PEI.

“We have three transactions in the pipeline. The first we have finalised is a joint venture with a UK company, for $35 million approximately, in a healthcare business, which we’ll complete in May. The second is a pharmaceutical company and the third is a logistic company. We’re currently in the due diligence process, and should finalise by July or August this year,” Ansari added.

The fund’s sector focuses are healthcare, fast moving consumer goods, IT and telecommunications, education and logistics. It will invest in SMEs.

“Private equity is very new in Pakistan, there’s not a high level of awareness among business owners about how it works,” said Ansari. “There are mostly family-owned businesses in the country, and the younger generations who have been educated abroad are now considering private equity as an option for their growth,” he added.