Fundraising

Citadel Capital eyes Iraq oil deals

The Cairo-based firm, which expects to close its first institutional fund on $500m this year, is mulling a push into Iraq’s oil and gas sector before multinational oil companies gain further ground.

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Citadel Capital is seeking attractive opportunities in Iraq and plans to invest in the war-torn country’s oil and gas sector.

The firm, based in Cairo, Egypt, needs to move into the country’s oil and gas sector before bigger multinationals like ExxonMobil and Shell move in, according to Ahmed Heikal, chairman and founder of Citadel Capital.

“We need to be there and we need to be there right now,” Heikal said Friday at PEI Media’s Emerging Markets Private Equity Forum in New York .

He added opportunities will be best while the country is still stabilising and many companies are concerned about the security situation.

“They’re rebuilding, and [Iraq] will be stable in five, six, seven or eight years,” Heikal said. The firm already has energy platforms with operations in Egypt and Pakistan called National Petroleum Company and NOPC/Rally Energy Corporation.

Citadel has established a foothold in Iraq through a cement platform it has developed called ASEC Cement. The firm bought an 85 percent stake in Iraq’s GRD Cement in 2007 as an add-on to the cement platform. The firm is focused on making more add-on investments in Iraq for the platform.

“Given the right opportunities, we will look in the country,” Heikal said.

Citadel is raising its first institutional fund, targeting $500 million, for investments in the Middle East and North Africa region. It expects to hold final close on the fund this year, Heikal said. Citadel Capital Joint Investment Fund will invest in industrial consolidations, distressed and turnaround companies, buyouts and selective greenfield projects.

Citadel, formed in 2004, has invested $750 million of its own funds alongside regional co-investors. About 98 percent of the firm’s limited partners are from the MENA region.

The firm controls investments worth more than $8.3 billion across 12 countries. Its deals have been financed individually through sector-specific or opportunity-specific funds. The firm looks for deals larger valued at $100 million or larger and contributes 10 to 20 percent of equity in each deal.