Gulf Capital, one of the region’s leading alternative asset management firms, announced today the launch of a new regional credit business that will focus primarily on providing liquidity and growth capital for regional companies and acquisition finance for private equity firms in the Middle East and Turkey.
The new credit business will fill an acute gap in the market for MENA financing by offering credit solutions to corporate and private equity investors as they grow the value of their businesses. A US$ 250-300 million Credit Fund, “Gulf Credit Partners”, will be launched by the end of the year following the regulators’ approval. The Fund will invest in a wide range of opportunities such as private equity-backed acquisitions and growth capital for companies where debt finance is an attractive alternative to equity. Investments in corporate loans and bonds will also be considered, thereby covering the entire debt spectrum. Unlike traditional asset-based lenders, the financing provided could be based on the cash flows generated by the borrower. As such, the financings will be flexible using various structures to meet borrowers’ needs including longer maturities and more deferred repayment dates than those typically seen in traditional lending.
Gulf Credit Partners’ senior management will be co-led by Mr. Christopher Baines who brings 25 years of international banking, structured lending, LBO financing and investment management experience to the company. Mr. Baines has extensive experience in the credit and mezzanine space gained from working at leading financial institutions globally and in the region. He will be joined shortly at Gulf Credit Partners by another co-Head with substantial mezzanine and debt financing experience in the Middle East.
Commenting on the new venture, Mr. Hareb Al Darmaki, Chairman of Gulf Capital, said: “The addition of a credit business to Gulf Capital’s existing platform is part of our long-term plans to position the Firm as the premier alternative asset manager in the Middle East. The launch of the Credit Business is a timely one and will play an important role in providing much needed liquidity and growth capital to mid-market companies in the region. Long-term, this will translate into a positive contribution and stimulus to the overall economy.”
Dr. Karim El Solh, Chief Executive Officer of Gulf Capital, added: “The launch of our Credit Business is an important milestone in the evolution of Gulf Capital. As a leading regional alternative asset management firm, the natural progression for Gulf Capital was to expand into credit, a new alternative asset class for the Middle East. This new initiative mirrors the evolution of global buy-out firms into diversified alternative asset management platforms, notably in the US and Europe. This expansion strategy is part of Gulf Capital’s long-term goal of increasing its overall assets under management and boosting and diversifying its overall profitability.”
Mr. Christopher Baines, Managing Director and co-Head of Gulf Credit Partners added: “Our entry into the regional credit market is a timely one given the substantial gap in the market for MENA financing at a time when bank lending is constrained. The shortage in regional liquidity is forcing borrowers to seek new alternative solutions to finance their growth plans. More sophisticated, cash-flow based lending is needed to meet those demands for capital, especially when companies are expanding or making acquisitions. Finally, we believe that an investment in the Credit Fund will give our investors attractive superior risk-adjusted returns with a large current income component, which will help diversify and enhance their investment portfolios.”
Dr. Karim El Solh concluded: “While Gulf Capital continues to be focused on its growing Private Equity and Real Estate businesses, we are equally excited about the possibility of providing our shareholders and investors with additional exposure to the attractive regional credit asset class. Given the expertise of our team, the substantial size of our upcoming credit fund, our proprietary sourcing and structuring abilities and the considerable corporate demand for specialized lending in the region, Gulf Credit Partners will be well positioned to become the preferred provider of sophisticated debt finance solutions in the Middle East.