This week, two small investment funds were established aimed at funding growth in Libya and Algeria. These funds are originating from Bahrain, Libya, and Algeria with US investors' involvement. The first, Tuareg Capital will base its investment commitment on Islamic financial rules, while the Phoenicia Group will target specific industries in Libya.
The first firm, Tuareg Capital Ltd announces that it has reached its first close target of US$30 million in commitments to its inaugural US$100 million fund, the Libya Fund. Tuareg Capital is a private equity firm established in 2006 and focuses on investment opportunities in North Africa.
The Libya Fund offers investors the opportunity to participate in a professionally-managed private equity fund, taking advantage of Libya's attractive investment prospects. The Fund will seek to benefit from the emergence and development of one of the last frontier economies in the MENA region.
Tuareg Capital is also pleased to announce the signing of a strategic partnership with Capital Management House or CMH, Capital Management House (CMH), a new Islamic investment firm based in Bahrain. Under this alliance, Tuareg Capital will partner and co-operate with CMH on investment opportunities in North Africa, particularly with regards to Islamic debt financing and other structured financing opportunities. CMH will also be a cornerstone investor in the Fund.
Tuareg Capital is a private equity firm focused on investment opportunities in North Africa, with a primary focus on Libya and Algeria. The company is involved in funding and promoting investment opportunities through proprietary or third party funds, partnerships and special purpose vehicles.
With offices in Tripoli, Bahrain and London, the company's shareholders include some of the region's business groups and entrepreneurs, with founding shareholders being ASA Consultants ("ASA") and United Gulf Industries Corporation B.S.C (UGIC), both based in Bahrain.
ASA was founded in 1994 by Mr. Abdulla A. Saudi, the Founding President & Chief Executive of Arab Banking Corporation. It is an independent advisory firm licensed by the Central Bank of Bahrain, with offices in Bahrain & Libya. ASA advises clients on asset allocation and portfolio management, in addition to providing a range of corporate finance, institutional investment and M&A services to regional and international financial institutions, governments and corporations. Transactions that ASA has led or participated in include the privatization of Italian television network 'Mediaset', the re-capitalization of 'Banca di Roma' (now 'Capitalia') in Italy, the acquisition of Credit Libanais in Beirut, the capital restructuring of the Housing Bank for Trade & Finance in Jordan and the sale of ABN-Amro Bank's Bahrain banking operations to BankMuscat.
UGIC is a public Shareholding company listed on the Bahrain Stock Exchange. UGIC's principal objectives are to develop and promote industrial, chemical, and energy related projects, primarily in the Gulf region, identify and invest in direct investment opportunities (private equity) and invest in listed stocks and other financial instruments directly or through collective investment schemes such as funds and partnerships. UGIC identified, developed, financed and sponsored mid to large-size industrial projects in Saudi Arabia and Bahrain. UGIC's partners in such projects include Saudi Arabian Basic Industrial Company ("SABIC"), Gulf Investment Company, Kuwait ("GIC"), Qatar National Steel and others. UGIC's investments include Gulf Ferro Alloys Company, Dhahran Chemical Industries & Marketing Company, Arabian Industrial Fibers Company and Yanbu National Petrochemical Company. UGIC is also a founding shareholder in the Middle East's first stainless steel company, United Stainless Steel Company, located in Bahrain.
In response to signing the partnership agreement with CMH and to successfully reach the Fund's first close target, Mr. Adel Saudi, Chairman & CEO of Tuareg Capital, said "we are delighted to form such a strategic partnership with CMH. They are an extremely focused and well managed investment banking group who offer us an array of services and abilities. As well as making a significant commitment to the Libya Fund, they will be instrumental in helping us to structure innovative financing solutions in our target markets. We see the partnership as a true win-win situation. With regards to the Fund, we have been delighted by the response from investors in the region. Libya is one of the most challenging markets in the MENA region to break into and investors view the Fund as a strong and strategic opportunity to gain exposure to the Libyan economy and its promising future. We believe that we are proposing a timely and compelling opportunity to investors. We will seek to leverage our team's significant and diverse skill-sets to generate superior returns across a diverse range of investments for our investors."
Mr. Saad Al Shamlan, CEO of CMH, said "we are absolutely delighted to have Tuareg Capital as our strategic partner for North Africa and regard this as the first step towards laying a firm ground for successful penetration into North Africa; in particular, Libya and Algeria. Under this strategic partnership agreement, CMH committed to approximately 70% of the Libya Fund's first closing amount and will provide high quality services as well as structuring sharia'a compliant products for the Fund. The Fund will seek to capitalize on the recent market reforms and liberalizations that are ongoing in Libya, and it is already evaluating a number of investment targets in a range of sectors."
Meanwhile, Phoenicia Group a U.S.-Libyan diversified business and consultancy, said its Libu Capital S.A, its dedicated Libya-centered private equity firm offshoot, has secured $95,000,000 in commitments surpassing initial expectations and reaching its first close target for its $300,000,000 Tripoli-based Libya Fund.
The planned capital for the pioneering Fund, Libya's first, was initially set at $100,000,000, later being upped to triple that amount due to investor enthusiasm and preliminary commitments from institutional investors, with most LP's expected to come from Libya, the U.S., Europe, and the Middle East.
Phoenicia Group is committing $20,000,000 to the inaugural Fund, with the rest of the commitments coming from the Libyan Arab African Investment Group and a European investment bank.
According to Ryad Sunusi, Phoenicia Group President and CEO, "the Fund was strategically planned and will be managed by some of the best in the business; with hands on experience in diverse market sectors in Libya, with a focus on tourism, construction, oil services, and industry, sectors selected for the tremendous opportunities and liberal investment mechanisms in place."
But Sunusi warns investors to be wary of private equity funds and other investment vehicles based outside Libya that have no backing from the Libyan government and little or no practical experience in identifying investment opportunities in the country. "There will always be parties who pop out once in awhile with one aim in mind, fleecing investors and delivering little on promises."
"These guys, almost without exception, have a very limited understanding of the Libyan legal and business environment and no strategic game plan or long-term planning and relationships for managing a successful investment portfolio, and what's more are not even based in Libya but overseas."
© The North Africa Journal 2007
