Saudi firm looks international for $600m Fund III

Amwal AlKhaleej, a firm based in Riyadh, wants to raise up to SAR2.2 billion (€414 million; $600 million) for its third private equity fund, and for the first time is looking beyond the Middle East region for investors.

Amwal, established in 2004 with the backing of several powerful Saudi Arabian families, closed its most recent fund, Amwal AlKhaleej II, on SAR1.4 billion in 2007. The fund, which included minimal investments from outside the founding Saudi families, is about 90 percent deployed, according to Amwal’s web site.

The fee structure on Fund III would be “a traditional 2 and 20” and 80 percent of the transaction fees will go back to investors, according to Jeremie Le Febvre, a partner with placement firm Triago. Amwal hired Triago to find international investors.

“The firm decided to go global and to bring in some good names, which will hopefully help [the firm] grow its name,” Le Febvre said.

Going Global

Part of the rationale behind attracting international limited partners is to hedge against any kind of risk associated with having an investor base made up of investors in one region, Le Febvre said.

Le Febvre said an attractive area for Amwal to find investors is Europe. The firm, which also has offices in Cairo and Dubai, also is looking to Asian investors for support. “Saudi Arabia is the largest consumer market in the Middle East region, and the interaction between Saudi Arabia and China is very limited,” Le Febvre said. “This could be a way of accessing it.”

Amwal is led by chief executive officer Ammar AlKhudairy. The firm’s investments from its second fund include a 60 percent stake for an undisclosed amount in Sports Club, which runs 22 centers across Saudi Arabia. The firm also took a 52.5 percent stake for an undisclosed amount in Rowad Schools, which runs pre-college education centers.