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Kuwait’s Global Investment House to float private equity fund in London

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Kuwait-based asset manager Global Investment House has announced plans to launch an initial public offering of Global MENA Financial Assets, a closed-ended private equity fund, and to list

Kuwait-based asset manager Global Investment House has announced plans to launch an initial public offering of Global MENA Financial Assets, a closed-ended private equity fund, and to list the fund on the London Stock Exchange’s main market. It is managed by Global Capital Management, a wholly-­owned group subsidiary.

Global MENA Financial Assets will seek to raise up to USD500m through an offering to institutional and professional investors in various regions including Gulf Co-Operation Council states and will acquire from the proprietary investment arm of Global Investment House a diversified initial portfolio of eight private equity investments in financial institutions predominantly in the Middle East and North Africa region. Trading in the shares is expected to begin on or around July 18.

‘Global Investment House is delighted to be creating a new closed-ended investment company for investors seeking to access the high growth MENA financial services sector,’ says chairman Maha Al Ghunaim.

‘The favourable macro-economic environment and demographics in the MENA region combined with Global Capital Management’s track record of sourcing attractive opportunities and achieving profitable returns means that Global MENA Financial Assets represents a compelling investment opportunity.’

JPMorgan Cazenove has been appointed sole sponsor and sole global co-ordinator in connection with the offer, and with Global Investment House is joint book-runner and joint lead managers. J.P. Morgan Securities is also a joint lead manager on the offer.

Global MENA Financial Assets is a closed-ended investment company incorporated in Guernsey that seeks to generate absolute returns by investing in a diversified portfolio of private equity financial sector assets predominantly in the target region comprising Algeria, Bahrain, Egypt, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Qatar, Saudi Arabia, Tunisia, Turkey and the United Arab Emirates.

Global Investment House says the launch represents a compelling investment opportunity because of the rapid growth of the financial services sector and to the initial portfolio of assets, which is valued at USD272m.

Since 2003, Global Capital Management has invested USD934m and committed USD1.1bn to 46 private equity portfolio companies, realising a net internal rate of return of 55.82 per cent. Of these transactions, more than a quarter were investments in the financial services sector.

As a regional private equity player, Global Capital Management has substantial proprietary dealflow sourced from an extensive network of relationships within the region. It expects Global MENA Financial Assets to be fully invested within 12 months of the IPO.

Global Investment House will retain a stake of 29.99 per cent in the company, and will grant an option expiring 12 months after admission to transfer back to Global Investment House all the unlisted investments in the initial portfolio, representing 64 per cent of the total value of the portfolio at the time of the original transfer, at the original price.

Global MENA Financial Assets will acquire and manage controlling and significant minority stakes in the financial services sector, an investment approach based on macro-economic and sector analyses, and the manager will seek to enhance value through active engagement with portfolio companies.

Global Capital Management is a Cayman Islands-domiciled exempted company and a wholly-owned subsidiary of Global Investment House, an asset manager and investment bank with more than USD9.3bn in assets under management at the end of March. Its management team includes more than 35 investment professionals.

Global MENA Financial Assets is expected to pay annual dividends to shareholders equivalent to substantially all of the cash generated from its operations after payment of tax and operating expenses.

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