Investcorp, Standard Life Plan To Raise Up To $1bn For Gulf Fund

Bahrain’s Investcorp Bank and Standard Life Aberdeen plan to raise $800 million to $1 billion for a fund to invest in infrastructure in the Gulf Cooperation Council.

The venture between the Bahrain-based alternative-assets manager and the Scottish firm’s Aberdeen Standard Investments unit will focus on healthcare, education and utilities. It may also invest in the wider Middle East and Levant.

“The GCC region has always benefited from significant availability of capital from the state,” Investcorp co-Chief Executive Officer Hazem Ben-Gacem said in an interview in Abu Dhabi. “Now with oil at half what it was a few years ago and the ambition of governments to diversify away from oil, the window is opening for private capital to play a bigger role in this area.”

The partnership comes as Investcorp pushes ahead with plans to boost assets under management to $50 billion through acquisitions and growth in its private equity, real estate and alternative investments units. Last month, it announced a $1 billion European buyout fund in partnership with Coller Capital.

Set up in 1982, Investcorp is the Gulf’s largest private investor in U.S. real estate and has charted a new growth plan after a shift in management in 2015. Abu Dhabi sovereign investment fund Mubadala Development Co. acquired a 20 percent stake in Investcorp in 2017 as part of its strategy to grow through partnering with other investment firms.

First Close

Investcorp expects to have a first close for the fund at about $250 million in the summer and reach its target size about 12 months later, Ben-Gacem said. Besides the region, there is interest from Asian investors in the venture as the Gulf carries the advantage of being an emerging market with dollar pegs, reducing currency risk, he said.

Investcorp is already evaluating deals and will announce its investments at the time of the first close -- each of which would involve investing between $50 million to $80 million. It expects returns of between 11 percent to 14 percent, Ben-Gacem said.

“Saudi Arabia will undoubtedly be a big part of the fund given the plans to privatize a lot of healthcare assets over the next few years,” he said. “I hope this will be the first of many funds with Aberdeen, and all being well we could be back in the market for a second fund in a few years from now.”

For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.

Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.

RECENT NEWS

Emicool Secures First-ever Green Financing To Boost Sustainable Growth

The liquidity generated will be strategically deployed to accelerate the company’s district cooling projects across t... Read more

UAEs Ruya Becomes First Global Islamic Bank To Offer Shariah-compliant Crypto Trading

Digital Islamic bank ruya teams up with Fuze to offer secure, ethical crypto investments aligned with Islamic financial... Read more

Startups In Abu Dhabis Hub71 Secured $2.17bn In Funding Last Year

Hub71 startups in Abu Dhabi saw massive increase in funding in 2024 as innovation economy thrives Read more

UAE Fintech Pay10 First To Launch On Central Banks Open Finance Framework

The company has acknowledged the Central Bank of the UAE's crucial role in facilitating a responsible and secure rollou... Read more

PayPal Expands In MEA Region With Its Newly Launched Hub In Dubai

Will serve 80 countries in Middle East and Africa from its Dubai Internet City hub; Has signed several deals with regio... Read more

New Board Certifies DMCC Tradeflow As Fully Shariah Compliant

Shariah Supervisory Board appointed to oversee Tradeflow’s Islamic finance offering; Certified fully-compliant with A... Read more