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Sun 8 Jan 2006 04:00 AM

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Private funds target region’s healthcare sector

Two new funds are poised to invest up to US $200 million in the development of the regional healthcare services sector.

Injazat Capital, an Islamic investment company, has launched a US $100 million healthcare investment fund. Investments will be made in healthcare providers and ancillary services in the Middle East and North Africa (MENA) region, with the objective of creating industry-dominant health groups with regional reach.

“The launch of Shefa Healthcare Fund is in keeping with Injazat’s commitment to provide high-quality yet affordable healthcare services in the Middle East,” said Hussein Rifai, chief executive officer, Injazat Capital.

“The global healthcare sector is in the midst of an important phase, with breakthrough technologies and innovations radically altering conventional methods of medical services provision.

"In this regard, it is vital that the healthcare sector in the Middle East too reflects these changes by adopting best practices. Shefa Healthcare Fund will make judicious investments in the Middle East medical sector, with the aim of transforming the region into a high-standard healthcare services hub.”

Shefa aims to acquire majority stakes in healthcare providers in accordance with Islamic principles. Established under the rules of the Bahrain Monetary Agency (BMA), the fund can hold Islamic debt not exceeding a 60/40 debt to equity ratio.

Injazat is currently managing Injazat Technology Fund, which has invested US $50 million in technology, media and communications companies across the Middle East and North Africa region (MENA).

Separately, US-based Ascent has launched a $100 million fund that it says will promote the development of the medical technology industry in the Middle East. Specifically, the fund will invest in American companies, requiring those firms to use 50% or more of the invested capital to operate or produce their product or service in the Middle East.

According to Peggy Farley, one of the general partners of the Ascent Medical Technology Fund II, a lack of venture capital has stifled the development of the medical technology industry in the region.

“In the United States, a high proportion of GDP has historically gone towards financing entrepreneurs, physicians, engineers and start-up companies, and we will bring this expertise – and best practice framework – to replicate this success in the Middle East,” Farley said.

“Primarily, the Fund will establish a foundation for a medical technology industry in the Middle East that can compete in the USA and Europe.

The International Finance Corporation, a division of the World Bank, is the lead investor in the Ascent Medical Technology Fund II. For interested investors, the minimum commitment is $1 million for individuals and $5 million for institutions.

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