Gulf firms unite in $2.8bn fund

Three Gulf firms create new investment funds to channel Dh10.3bn into Middle East and South Asia projects.

A group of prominent Gulf investment firms have created three new investment funds to channel at least $2.8 billion (Dh10.3 bn) into infrastructure, agriculture and hospitality projects in the Middle East and South Asia. The group of investors, which includes the Abu Dhabi Investment House (ADIH) and the Bahrain-based Ithmaar Bank and Gulf Finance House, had identified key investment niches across the region and moved to develop a first competitor advantage, said Rashad Yusuf Janahi, the managing director of ADIH.

"It's a unique initiative, we did our homework and we have experienced positive feedback," he said. Together, the three funds will raise $2.8bn from the companies' own contributions and the participation of private investors. They are authorised to raise up to $10 billion. The first of the three funds, to be called InfraCapital, will invest in infrastructure to support mega-property projects across the Middle East. The fund has an authorised capital pool of up to $6bn, with the companies looking to initially raise $1.5bn.

The second fund, AgriCapital, will serve as a bank for large agricultural producers, and invest at least $1bn into biotechnology and food production overseas, Mr Janahi said. The Hospitality Development Fund was the third investment vehicle announced yesterday, and will focus on both direct investments of at least $300 million in tourism infrastructure, such as hotels, and take stakes in successful tourism firms. [e-mail]