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Gulf Capital Closes Its Second Private Debt Fund Above its $250 Million Target

Gulf Capital Closes Its Second Private Debt Fund Above its $250 Million Target
December 19, 2016

Gulf Capital, one of the largest and most active alternative investment firms in the Middle East, today announced the successful final close of its second private debt and mezzanine fund, Gulf Credit Opportunities Fund II, over its target cover of US$250 Million (AED925 million).

Gulf Credit Opportunities Fund IIis an actively managed fund that will invest in a diversified portfolio of mezzanine, convertible debt and preferred equity issued by privately-owned mid-market companies across defensive sectors and geographies in the Middle East, Turkey andAfrica region. The Fund invests in private credit transactions originated and underwritten by Gulf Capital. It is the Company's 10th investment vehicle since its founding in 2006.

Dr. Karim El Solh, Chief Executive Officer of Gulf Capital which is celebrating its 10th anniversary this year, said: "Private debt in the region is becoming an attractive asset class for investors seeking a consistent, high cash yield. Investors recognise the value of our proprietary sourcing and active investment approach to generate absolute, risk-adjusted returns that Gulf Capital's private debt fund has been able to achieve irrespective of the business cycle. We are particularly pleased with the quality of the institutional investors backing our second Private Debt fund and by the fact that the investors in our first fund decided to increase their allocations and back our second fund. With the launch of our 10th investment vehicle, Gulf Capital today has become one of the largest and most diversified alternative asset managers in the Middle East."

Gulf Credit Partners, the manager of Gulf Capital's private debt business, sourced commitments for its second-generation fund from Sovereign Wealth Funds (SWFs), international institutional investors, regional insurance companies, foundations, and family offices. A significant number of investors in the prior fund made new and increased commitments to Fund II, which also attracted many new investors. The International Finance Corporation (IFC), a member of the World Bank Group and the largest global development institution focused exclusively on the private sector in developing countries, raised its commitment to Fund II to US$25 million, up by 25% from its previous commitment to Fund I. Other repeat investors increased their commitment by up to 50%.

Walid Cherif, Senior Managing Director and Head of Gulf Credit Partners at Gulf Capital, said: "We see growing opportunities in this alternative asset class in a region that lacks adequate traditional financing for SMEs, the backbone of our economies. Gulf Capital is filling this gap by supporting the future champions across defensive sectors of the economy. We invest in experienced management teams with a solid track-record of financial performance, robust cash flow generation and good corporate governance, helping them grow to the next level. The launch of our second Private Debt Fund is timely as we see significant investment opportunities across our target region."

Fidaa Haddad, Managing Director Gulf Credit Partners at Gulf Capital, said: "The mix of regional insurance companies, sovereign wealth funds, foundations and family offices and the repeat investments in Fund II reflect the confidence our investors have in Gulf Capital's private debt investment thesis, the fund's multi-dimensional diversification strategy and the strong returns generated to date. Our first fund invested in eight industries across five asset classes within the sector to offer three types of finance- Growth Capital, Acquisition Finance and Buyouts. Fund I invested in sectors including power, education, oil and gas servicing, business services, industrials, healthcare and telecoms across a number of structures including mezzanine and convertible debt."

"The successful raising of Fund II in this difficult regional environment is a proof for a demonstrated strong track record by Gulf Capital's private debt business and its team. We are very grateful for the continued support from our investors who believe in our sustainable growth strategies," concluded Walid Cherif.

Fund II will follow similar investment and diversification strategies as its predecessor. It will be investing in mid-market companies that are generating more than US$5 million in EBITDA, have revenues between US$20 million and US$250 million and operate in non-cyclical, growth sectors that are defensive in nature such as healthcare, education, industrials, power and water, oil and gas servicing amongst others. The fund's average investment size ranges between US$ 10 million and US$ 30 million, and is expected to finance 10 to 12 SMEs throughout its lifespan.

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Fraud Alert

Fraud Alert - Important alert to Gulf Capital Investors,Shareholders, the Financial Services Community and the Public

Fraudsters are engaging in a fraudulent email and website scams whereby websites and communications are targeting members of the public and potential investors (victims) by fraudulently using the identity of legitimate members of Gulf Capital's Executive team or Gulf Capital's Board of Directors to solicit investments, fake job offers and other dealings, without authority, and for a malicious purpose. Neither Gulf Capital's Chief Executive Officer nor any members of its Board of Directors or other members of its Executive team have made any offers for investment partnership, offers of employment or other dealings through these channels and the names, and identities of such individuals are being used illegally and without their consent.

Gulf Capital and its management have taken and will continue to take legal action against anyone found misusing Gulf Capital's name or the names or identities of any members of the Board of Directors of Gulf Capital or Gulf Capital's Executive team illegally or without consent for whatever reason.

Report Scams

We invite you to immediately contact fraud-detection@gulfcapital.com* if any of the following occur:

  1. You have received any unsolicited correspondence or investment advice or you think you have been contacted in relation to a possible scam (whether by telephone, email or courier) by sources fraudulently impersonating Gulf Capital's Board of Directors or any members of Gulf Capital's Executive team.
  2. You have received notice from anyone outside of Gulf Capital informing you or raising concern regarding the fact that they may have been contacted by any sources fraudulently impersonating Gulf Capital's Board of Directors or any members of Gulf Capital's Executive team.
  3. You have received any communications referencing any of Gulf Capital's Board of Directors that you consider are suspicious or which you are not sure how to respond to.
  4. You have any concerns about the authenticity of any website passing itself off as a website operated by Gulf Capital or referencing the names and identities of the Board of Directors of Gulf Capital or any of its Executive team without authority.
*Note: When forwarding suspicious e-mails to fraud-detection@gulfcapital.com:
  1. Do not modify the original subject line or contents enclosed, and do not include any personal or confidential information.
  2. Forward the full internet headers of any suspicious emails to fraud-detection@gulfcapital.com before deleting as this information willhelp Gulf Capital to track the true origin of the correspondence. The internet headers can be found through your e-mail system from within the e-mail. For example, in Microsoft Outlook, you can find the internet headers by opening the e-mail, then choosing "View" and "Options". Depending on the e-mail system that you use, the process for locating the internet headers will vary. We recommend you either copy and paste the internet header and message into a new e-mail or scan the e-mail and full headers and send as a PDF attachment to ensure it is received by fraud-detection@gulfcapital.com.

Protect Yourself

  1. We recommend that you avoid getting into a conversation with any fraudsters or revealingany personal or identifying information, but you should endeavor to record thepurported name of the person and organisation along with any other information they give you (e.g., telephone number, address etc.) and then forward all such information to fraud-detection@gulfcapital.com.
  2. You should obtain independent legal and financial and professional advice before handing over any funds or entering into any agreements in relation to such solicitations.
  3. We recommend that you not respond or open any attachments or links associated with any suspicious e-mails.
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