Abraaj Group has acquired a Palestinian provider of Arabic educational games and toys.
The Dubai-based private equity house made the investment in Anoud Games through its Palestine Growth Capital Fund in partnership with the Palestine Investment Fund, the largest investor in the Palestinian Territories.
"Anoud Games is now well positioned to increase its product range and geographic reach in order to capitalise on the attractive regional demographic trends in this underserved subsector," Ahmed Badreldin, Abraaj's head of Middle East and North Africa said in a statement. "Abraaj will support Anoud in expanding its product range over the investment horizon and extending its geographic reach, allowing it to export its products regionally to serve the wider Arabic-speaking audience."
Abraaj, with US$7.5 billion (Dh27.54bn) worth of assets under management, has been increasing investment in the Palestinian Territories since the launch of its fund dedicated to small and medium-sized enterprises there in 2009.
Anoud Games, based in Jerusalem, is one of the biggest manufacturers and distributors of toys in the Palestinian Territories, the statement said. The Palestine Investment Fund, with $800 million in assets under management, is the Palestinian Authority's primary vehicle for attracting foreign investment to the West Bank and the Gaza Strip.
It comes amid recent interest from Dubai-based investment banks looking to tap growth in a high-risk frontier market. Rasmala Investment Bank launched a Palestinian-focused fund two years ago targeting equities listed on the national stock exchange.
The Arab-Israeli conflict, which has battered the economy of the Palestinian Territories, has put the domestic market on the map for its delicate political situation rather than its earning potential. But amid two years of Arab uprisings, it has emerged as a bright spot for institutional investors.
Two years ago, Mark Mobius of Franklin Templeton classified the Palestinian Territories a "viable market".
The Palestinians "are very entrepreneurial people. While two million people may not present a great market you have to take into account their ambition", he told Citywire, the London-based financial magazine. "The diaspora around the world is also equal to the whole of Palestine."