MENA infrastructure fund raises "up to" $250m

You'd think that there would be healthy interest in a fund that proposes to invest in Gulf infrastructure, given its importance as the foundation for the region's ambitious development plans. And there is - sort of. Today, a joint venture between the Abu Dhabi Investment Company and UBS announced that its MENA infrastructure fund had secured commitments of "up to" $250m (I'm assuming some of those commitments are contingent). But it also said it was looking to raise another $350m, bringing its total to $600m. That's a sizable funding gap to fill.

The fund plans to invest its cash in the next three to five years. I'm not entirely clear on what they're going to do with it, although from the press release it appears they're looking at making deals with governments to build infrastructure projects on previously undeveloped land: "Most of the fund's investments will be in 'greenfield' assets but because we are talking about primarily government concessions or long-term contracts with solid partners, cash flows are predictable and the risks less than in pure private sector deals," Vincent Gilles, the CIO of the JV, said in the release.

ADIC and UBS announce first close of Middle East Infrastructure fund

Abu Dhabi, United Arab Emirates

Abu Dhabi Investment Company (ADIC) and UBS Global Asset Management have announced first close of a jointly managed fund to tap major infrastructure development in the Middle East and North Africa, with commitments of up to USD 250 million. The fund is seeking additional commitments to meet its planned target of USD 600 million.

The joint venture, which was formed in 2008, has attracted major institutional investors to its first fund. The fund will invest in transport networks, power, water, and health and education facilities at a time when governments are pushing ahead with ambitious infrastructure spending plans. Independent research commissioned by the fund indicates that over USD 400 billion of infrastructure development is planned for the Middle East and North Africa region over the next decade.

"The Middle East is often seen as a source of capital but we want to highlight to investors that there are also great investment opportunities here," said Mark Thompson, Chief Executive of ADIC-UBS Infrastructure Investment, based in Abu Dhabi.

Many governments in the region have set aside surpluses from oil revenues for infrastructure development but they are also increasingly turning to institutional investors for the capital to help meet demand driven by fast growing and young populations.

"Infrastructure in the region is still being developed and there's a massive need for equity," continued Mr Thompson.

"In these very difficult times in global markets, investors are very selective. Our team, which combines experienced and talented individuals from both UBS Global Asset Management and ADIC, has over 80 years of investment experience and in-depth knowledge of this region," said Vincent Gilles, Chief Investment Officer of ADIC-UBS Infrastructure Investment.

The Fund aims to make its investments over the next three to five years in the Middle East and North Africa. "Most of the Fund's investments will be in 'greenfield' assets but because we are talking about primarily government concessions or long-term contracts with solid partners, cash flows are predictable and the risks less than in pure private sector deals," added Mr Gilles.