Arcapita Bank, the Bahrain-based international investment firm formerly known as First Islamic Bank, has launched Arcapita Ventures I at $200 million. The firm said the fund will invest on behalf of Gulf Cooperation Council investors, and will invest exclusively in Islamically approved venture capital investments in the US.
The investment bank and its affiliates will invest up to $50 million in the fund, which will have a duration of ten years. It will be managed out of Arcapita’s office in the US, which was formerly known as Crescent Capital Investments until the bank changed its name last year. The bank has been sourcing private equity, real estate and asset-based transactions from its US office for the past decade.
The fund will focus on growth and expansion stage companies in the healthcare, information technology and industrial technology sectors.
Arcapita has used its own capital to complete the first three investments in the fund. To date, the fund has invested a total of $21.5 million in Cardiomems, a medical device company in Atlanta, in Alloptic, a California-based company whose technology optimises voice, video and data communications, and in Prenova, a provider of energy management technology based in Georgia.
“It is clear from our conversations with our investors that there is a high level of interest in venture capital as an asset class,” said Arcapita CEO Atif Abdulmalik, Arcapita’s in a statement. “Given the attractive environment for venture capital in the United States, and our ability to leverage the resources of our US office, the States was the obvious region from which to launch our venture capital business.”
Arcapita said it may also consider opportunities in Europe and Asia in time.
The venture capital team is led by John Huntz, a veteran of the private equity and venture capital business, who has served on the board of directors of the US National Venture Capital Association.
The launch comes shortly after the bank announced its largest corporate transaction to date with the €620 million acquisition of Paroc, a Finland-based manufacturer of technically advanced insulation products. Since its founding in 1998 the firm has completed 56 transactions out of its offices in Manama, London and Atlanta, with a total transaction value of over $12.5 billion.