SHUAA Partners looks to raise $730m for hospitality

The Dubai-based private equity firm is nearing the first close of its $200m MENA-focussed hospitality fund, and has begun marketing another $530m fund specifically for Saudi Arabia.

SHUAA Partners, the private equity arm of Middle Eastern investment bank SHUAA Capital, is raising a SAR 2 billion ($534 million; €343 million) hospitality fund for Saudi Arabia.

Oliver Schutzmann, head of investor relations at SHUAA Capital, told PEO that the fund is currently in the “soft marketing” phase and will focus on developing and hotel projects in Saudi Arabia.

The Saudi hospitality fund will see a SAR 200 million investment from SHUAA Hospitality Fund I, a separate $200 million fund the firm is currently raising for investments in hotel developments in GCC, Egypt, the Levant and other selected MENA countries.

SHUAA Hospitality Fund I is sponsored by the firm’s parent company SHUAA Capital, and Rotana, a Middle East hotel chain, both of which contributed $25 million to the fund. The remaining $150 million is being raised from institutional investors, Schutzmann said. He added that the firm is looking to have a first close for the fund in this quarter.

SHUAA Hospitality Fund I recently made its first investment by entering into a joint venture with Orascom for Hotels and Development, a property developer in Egypt, and Rotana to develop business-budget hotels in Egypt. The fund invested $20 million in the joint venture, and its investment was matched by Orascom. Orascom is the development partner and Rotana will operate the hotels, Schutzmann said.

The firm also manages SHUAA Partners Fund I and the Frontier Opportunities Fund I, $200 million and $100 million funds respectively.

It has made five investments from SHUAA Partners Fund I and exited from two of them. The current portfolio includes Air Arabia, a regional low-cost carrier; Rotana Hotels; and Drake & Scull International, an electrical, mechanical and plumbing contractor based in the UAE. SHUAA has exited its investments in Petrofac, a provider of integrated facilities and infrastructure to the oil and gas industry; and Damas, a jewellery business based in the UAE.

Frontier Opportunities Fund I has made a solitary investment so far in Syriatel, a mobile telecommunication network with the largest market share in Syria.