Abu Dhabi Capital Management, an investment company set up this year, took advantage of regional turmoil to complete three deals since it started a fund in March to buy out private-equity investors.
The fund, the first of its kind in the Middle East and North Africa, acquires holdings in private-equity vehicles at a discount from investors who otherwise wouldn’t be able to exit until the investment matures and then retains the position until maturity.
“We’ve completed two transactions in the Middle East and North Africa region and one in the US,” Chief Executive Officer Jassim Alseddiqi said in an interview in Abu Dhabi on Sunday. “The turbulence that happened in the past few months has even increased the severity of the discounts.”
Political unrest in the Middle East and North Africa that toppled Tunisia’s Zine El Abidine Ben Ali and Egypt’s Hosni Mubarak has caused fear amongst investors, prompting them to sell their holdings at “extremely lucrative prices,” Alseddiqi said. The company expects to realize returns of more than 120 percent in the next several years, he said.
The fund, known as ADCM Secondary Private Equity Fund, has so far raised $45m from high net-worth individuals and institutions, predominantly from the UAE and plans to raise $100m by February 2012.
Capital Management, which intends to exit the fund by 2016, values its current assets at $60m and plans to complete one or more transactions by year end, Alseddiqi added.
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