Kuwaiti private equity readies $500 mln London IPOReuters, Tuesday June 17 2008http://www.guardian.co.uk/business/feedarticle/7591399
By John Irish and Daisy Ku
DUBAI/LONDON, June 17 (Reuters) – Kuwait’s Global Investment House, which raised $1.15 billion in a GDR listing in May, announced on Tuesday a plan for a $500 million London listing for its private equity fund Global MENA.
Global MENA Financial Assets Ltd. is to list on the London Stock Exchange’s main market on July 18 to tap international investors’ interest in the booming Gulf region. The deal, arranged by JP Morgan Cazenove and Global Investment House (GIH), will start bookbuilding in the next two weeks, with the market debut of the private equity fund set for July 18.
Surging oil prices are fuelling growth in Middle Eastern countries despite the global credit crunch. The Kuwaiti stock market index has soared 23 percent since the start of this year to an all time record high on Tuesday.
Shares of Bahrain’s Gulf Finance House, the first Middle Eastern Islamic investment bank to list on the LSE, have jumped 60 percent since their 138 million pound ($271.5 million) listing in June 2007. Global MENA, in which GIH will retain a 29.99 percent stake, is a closed-end fund to invest in the financial sector in Algeria, Bahrain, Egypt, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Qatar, Saudi Arabia, Tunisia, Turkey and the United Arab Emirates.
The fund, to be managed by Global Capital Management, a unit of the Global Investment House (GIH), plans to pay $238 million for eight investments, valued at $272 million as of May 27, from the proprietary investment arm of GIH.
“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,” said GIH Chairman Maha Al Ghunaim.
Shares of GIH, the biggest Kuwaiti investment bank by market value, remained flat at $18.85 each, versus the issue price of $18.75 apiece at the global depository receipt (GDR) offering, the first ever from Kuwait, in a deal underwritten by HSBC, Deutsche Bank, JPMorgan and UBS.
Five Middle Eastern companies have raised a combined $1.6 billion on the London bourse so far this year.
In total, 34 Middle Eastern companies have raised $5.9 billion through LSE IPOs. GIH, which buys into companies and sells them through funds, closed a $615 million private equity fund, the Global Buyout Fund, earlier this year.
It has recently set up a $500 million Sharia-compliant private equity fund, the Islamic Buyout Fund, with Dubai Islamic Bank and Millennium Capital.
The Islamic Buyout Fund targets a net internal rate of return of 20 percent by investing in the Middle East, North Africa and Asia regions. (Additional reporting by Ulf Laessing, editing by Elizabeth Fullerton)