x Abu Dhabi, UAEWednesday 26 July 2017

Firm will target foreign investors for new $500m MENA stock fund

The National Investor (TNI), an investment bank based in Abu Dhabi, yesterday announced plans to raise up to US$500 million (Dh1.83 billion) from local and international investors for a new fund targeting stocks in the Middle East and North Africa (MENA).

ABU DHABI // The National Investor (TNI), an investment bank based in Abu Dhabi, yesterday announced plans to raise up to US$500 million (Dh1.83 billion) from local and international investors for a new fund targeting stocks in the Middle East and North Africa (MENA). TNI aims to attract a significant portion of the fund's assets from investors in Europe and the Far East, continuing a trend in which investment firms from the region have been looking increasingly to bring foreign capital to the GCC.

Kashif Zia, a director and the head of sales at TNI, said yesterday his firm planned to present the new fund, called the MENA Blue Chip Fund, to interested investors in London next week. Next month, a similar presentation is planned for Geneva and Zurich, followed by Tokyo in December. "The Middle East and the GCC were primarily a source of capital for European products, but that has changed over the past five or seven years," Mr Zia said. "European markets now are becoming increasingly fertile ground for raising money.

"We have seen interest develop in the listed equity space and we have been in preliminary discussions with investors since March." In the past, capital has flowed largely from the GCC to developed markets as those countries sought to reinvest their petrochemical dollars. But as the region's economies have developed, interest from large foreign investors in local markets has intensified. During the first round of fundraising, Mr Zia said TNI hoped to raise about $100m for the fund, which is to be seeded with about $30m of TNI's own money and from its shareholders and local associates. He said the first round of fundraising was expected to close during the first half of next year.

Further fundraising, combined with a rise in market valuations, could bring total assets to $500m, TNI said. In launching the fund, TNI joins other players in the Gulf, including Algebra Capital and Shuaa Capital in Dubai, which have looked abroad for fund investors in recent years. As it promotes the fund, TNI has been emphasising its conformity to developed-market regulations. It is selling the fund in the UK through the IGS Group, a marketing firm registered with the country's Financial Services Authority.

It plans to use similar vehicles in Switzerland and Japan. The firm has also been highlighting its track record, experience and status as an indigenous asset manager, setting itself in contrast with the many international firms that sell MENA funds but have their headquarters outside the Middle East. afitch@thenational.ae