ADIC-UBS attracts $250m for MENA investment fund

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MENA FUND: ADIC-UBS fund will invest in local government-backed infrastructure schemes.

Abu Dhabi Investment Company (ADIC) and UBS Global Asset Management have closed their jointly managed fund that aims to tap major infrastructure development in the Middle East and North Africa (MENA).

The fund, originally launched in 2008, has attracted $250m in its first round out of a $600m target, which will be invested over the next three to five years.

Investments will be made in transport networks, power, water, and health and education facilities at a time when MENA governments are pushing ahead with ambitious infrastructure spending plans, ADIC-UBS said in a statement.

ADIC said in March it was seeking firms with solid cash flows in sectors likely to be least affected by the economic downturn such as health, education and telecommunication.

Independent research commissioned by the fund indicates that more than $400bn infrastructure developments are planned for the MENA region over the next decade.

"The Middle East is often seen as a source of capital but we want to highlight to investors that there are also great investment opportunities here," said Mark Thompson, chief executive of ADIC-UBS Infrastructure Investment, based in Abu Dhabi.

Many governments in the region had set aside surpluses from oil revenues for infrastructure development, but they were also increasingly turning to institutional investors for the capital to help meet demand driven by fast growing and young populations, Thompson added.

"Infrastructure in the region is still being developed and there's a massive need for equity,” he said.

"Most of the fund's investments will be in 'greenfield' assets but because we are talking about primarily government concessions or long-term contracts with solid partners, cash flows are predictable and the risks less than in pure private sector deals," added Mr Gilles.

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