First Middle Eastern energy PE fund launched

The GCC Energy Fund Managers Limited have announced the launch of what it describes as the first private equity fund focused on the Gulf Cooperation Council's (GCC’s) energy sector.

Dubai-headquartered Emirates National Oil Company (ENOC) will co-sponsor the $300 million fund along with Gulf International Bank (GIB) and Standard Bank.

The fund will focus on making investments in the energy sector within the GCC region. The GCC countries comprise Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.

Commenting on the launch, ENOC CEO Hussain Sultan said: “The region’s strong energy industry outlook, the increasing role of the private sector in major projects investments and the constantly evolving GCC capital markets have been major influencing factors in the decision to participate in this strategic fund.”

The fund management company is one of the first companies to be licensed for business by the Dubai International Financial Centre (DIFC). Incorporating an electronic trading exchange scheduled for launch in September 2005 (DIFX), the DIFC aims to offer global financial institutions an attractive investment environment with zero rate of tax, 100 percent foreign ownership and the freedom to repatriate capital and profits without restriction.

Local news services have reported that the GCC states are committed to a GCC common currency by 2010, according to a recent announcement by Saudi Finance Minister Dr Ibrahim Al-Assaf.

Other funds that have launched in the region recently include the $500 million second buyout fund from Abraaj Capital. The Dubai-headquartered firm focuses on opportunities in the South Asia, Middle East and North Africa regions.

Another recently launched firm, Dubai International Capital, has just completed its inaugural private equity transaction. Last week the firm acquired UK theme park and waxwork museum operator Tussauds Group from Charterhouse Capital Partners for £800 million (€1.2 billion; $1.5 billion).