Report: Emirates NBD to launch infra fund

The chief executive of Emirates NBD Capital said in an interview that the bank is gearing up to launch an infrastructure fund to capitalise on a $500 billion infrastructure opportunity in the Gulf region.

Emirates NBD, one of the Gulf region’s largest banks, is in the process of launching a new infrastructure fund, according to a report in Emirates Business.

Kumar: wants to
monetise capital
in existing deals

Suresh Kumar, a board member at the bank and chief executive of investment unit Emirates NBD Capital, said in an interview that the infrastructure fund has been approved and should be launched in the near future, although he declined to comment on its size.

“We are making its structure into a fund or portfolio, where we can have strategic, institutional and high-value investors chipping in. This is not a retail initiative – it has both private equity and debt all together to make private capital. Some of it will be growth capital, and some will be monetising an existing capital,” Kumar said.

Kumar pointed out that an estimated $500 billion in infrastructure investments is needed in the Gulf region over the next five years. The United Arab Emirates and Saudi Arabia will account for $200 billion each with the other Gulf countries comprising the remaining amount.

The announcement comes soon after UBS Asset Management and state-backed Abu Dhabi Invest AD decided to liquidate their Middle Eastern infrastructure fund citing weak market conditions. The 50:50 joint venture had reached a first close of $250 million last year and was targeting a final close of $600 million. In a statement, the partners said the cancelation reflected “the companies’ assessment of the regional fund-raising climate for illiquid infrastructure investments in the region.”

But Kumar seems optimistic that Emirates NBD’s infrastructure fund will be different:

“There have been a few infrastructure funds but nothing in the nature of monetising existing infrastructure. By monetisation I mean that capital is already locked into these projects. The approach I am recommending is to unlock that capital and free it up so that the fiscal position of the country or state or province is improved.”