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Tue 19 Oct 2010 07:21 AM

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QFIB eyes private equity deals in MENA real estate

Islamic bank mulling investment stakes in energy, food and financial services

QFIB eyes private equity deals in MENA real estate
Real estate is an important asset but also a volatile one, said Mike de Graffenried. (ITP Images)

Qatar First Investment Bank (QFIB) is looking into a series of private equity transactions, including investing in the regional real estate sector, a senior official from the bank has said. 

“I can think of three or four real estate transactions that are live at this stage, although the issue with this business is that you tend to look at 100 transactions and you maybe do five – it’s of that magnitude,” Mike de Graffenried, CEO of QFIB, told Arabian Business.

“So we may look at four real estate transactions and only do one. It’s an important asset, but we’re also mindful that it’s a volatile one here. Other people found themselves overly concentrated on the sector – but it’s certainly one that deserves our attention.”

The Islamic finance house has already completed two transactions in the financial services sector, and is “looking carefully at three or four in the food industry, the CEO added.

“Part of the banking business – if you didn’t know it before – is that diversification is very important. So we’re looking at things in the food industry, we’re seeing transactions in oilfield services, in the oil and gas area in general,” de Graffenried said.

“We’re trying to build a balanced portfolio both in terms of regional and business sectors, and then as well trying to add additional different kinds of business – in the sense of the deposit-taking business or the asset management business.”

The CEO also indicated that QFIB would not be looking outside the "MENA plus Turkey" region to complete private equity transactions for the time being.

De Graffenried said that despite the sluggishness in the market over the last couple of years, the private equity business had treated the bank well, helping QFIB to a profit in its first year of operations.

However, he also indicated that as QFIB expands its portfolio of offerings, there were would be a decreased focus on the sector.

Recently, QFIB completed the acquisition of a 40 percent stake in Turkish healthcare provider Memorial Healthcare Group.

It has also bought a significant stake in Qatar Construction and Engineering (Qcon), an oil-and-gas-related EPC and maintenance contractor.

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