International private equity group, MerchantBridge, announced today that it will target equity investments in the Iraqi Stock Exchange (ISX)

Abu Dhabi - 18th October 2010: MerchantBridge, the international private equity group with diverse investment interests operating from Iraq, Lebanon, United Arab Emirates and the United Kingdom, has launched an Iraq equity fund, the "Mesopotamia Equity Fund Ltd".

The Mesopotamia Fund is an open ended fund that will capitalize on the expected long term growth of the Iraqi Stock Exchange (ISX). The market capitalization of the exchange, which reopened in 2004, has doubled to $3 billion in the past five years and it currently has more than 90 listed companies, mostly untouched by foreign portfolio managers.

Key highlights to note about the Mesopotamia Fund include:

  • The fund will invest across all sectors in the ISX.

  • The Iraqi stock market is young with an unprecedented growth potential, as it currently represents less than 3.3% of GDP compared to over 80% for the GCC and 73% in KSA respectively.

  • The ISX top 20 companies by market cap have outperformed most OECD and GCC indices since 2008 and are expected to rally over the next decade. Some of its blue chips include North Bank, Credit Bank of Iraq, Mansour Bank, and hospitality group Mansour Hotel.

MerchantBridge's new fund is being launched at a time when the government of Iraq is pushing for a number of key sectors to be privatized. An improving regulatory environment and an increasingly positive outlook is attracting international and institutional investors. Liquidity will grow further as the exchange extends its trading hours beyond the current two hours per day.

With infrastructure projects worth more than $220 billion announced and oil companies already investing in excess of $100 billion, oil production capacity will increase five-fold in the coming years.  As a result, economic activity in the country is set to expand significantly. Basedon IMF estimates, Iraq's GDP is expected to grow at a rate higher than its GCC neighbors and most emerging markets in the coming years.

Mr. Basil Al-Rahim, MerchantBridge Group Chief Executive Officer, said today:

"We believe in long term investment opportunities in Iraq.  Its sovereign wealth may well exceed many of its GCC neighbors by 2020 and this new fund will be an early mover in the trend towards greater international focus on Iraq's exciting investment landscape ".  

MerchantBridge is the largest private investor in Iraq to date, with investments of over US$1.5 billion in debt and equity since 2003. 

Mr. Eric le Blan, MerchantBridge Chief Operating Officer, added:

"We are proud to launch the Mesopotamia Fund as it will tap into the ISX, which although it is young, offers record growth for savvy investors who are considering investing in Iraq. This is an ideal opportunity for investors with a long term view and it offers an immediate and diverse entry into the Iraqi market".  

-Ends-

About MerchantBridge: 
MerchantBridge is an international private equity group established over a decade ago by a group of industry veterans focused on the Middle East and Europe regions. It is authorised and regulated by the FSA in London and also has offices in Dubai, Baghdad, Basra and Beirut. MerchantBridge also offers corporate finance advisory services in select situations to multinational corporations and governments including having been the advisor to the UK Ministry of Defence on their offset program in Saudi Arabia.  It specialises in identifying opportunities across the MENA region and Europe and executing on complex, cross-border opportunities.   It completed eight private equity transactions in Europe and the Middle East over the past few years with US$400 million in committed capital and investments with Enterprise Value of over US$$3 billion. In Iraq, MerchantBridge is already engaged in telecommunications ("Asiacell"), commercial banking ("Mansour Bank") and oil and gas services.  www.merchant-bridge.com 

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© Press Release 2010