SHUAA's private equity profits plunge

The private equity business of SHUAA Capital, the Dubai-based financial services institution, saw profits of AED 3.7 million ($1 million; €0.7 million) in the third quarter of 2009, down 90 percent from the third quarter of 2008.

In all, the parent's third quarter 2009 loss was AED269.3 million, nearly 39 percent less than losses it recorded in the same quarter last year.

SHUAA's private equity division did not make any exits or investments from July to September 2009. The firm said it is seeking investment opportunities for the SHUAA Hospitality Fund I and the SHUAA Saudi Hospitality Fund I and is nearing the acquisition of several plots of land in Saudi Arabia for its Saudi hospitality fund.

“Looking ahead, the regional private equity industry seems to be more cautiously optimistic than last year potentially indicating a return to more active capital deployment levels even though the exit environment continues to remain challenging,” the firm said.

The firm is refocusing its efforts on fee generating businesses and has engaged Bain & Company to help formulate its “future strategy against a changed regional landscape and new realities”, Sameer Al Ansari, CEO of SHUAA Capital, said in a statement.

Ansari, formerly the chief executive officer of Dubai International Capital, replaced Iyad Duwaji as the chief executive officer of SHUAA Capital In September. Duwaji resigned as the CEO of SHUAA in August to set up his own private equity business.

SHUAA Partners closed its first fund in September 2005 on $200 million. Its second vehicle, Frontier Opportunities Fund I, closed on $100 million in October 2007. The firm is currently in the market for SHUAA Hospitality Fund I, which saw a first close on $165 million in June 2008.

In August 2008, the Saudi arm of SHUAA Capital held a first close on $240 million for SHUAA Saudi Hospitality Fund I, which is targeting $534 million for its final close.