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Abraaj Capital and the Palestine Investment Fund announce first closure of $50m Palestine Growth Capital Fund

2012-03-12

Abraaj Capital, Palestine Investment Fund (PIF), Bank of Palestine (BoP), Cisco and the European Investment Bank (EIB) on Monday announced the first close of the Palestine Growth Capital Fund, which will provide private equity growth capital investments and management support to high growth small and mid-cap companies (SMCs) in Palestine.

The announcement was made during an event in Ramallah attended by SMCs, the business community, investors and the media.  

The Palestine Growth Capital Fund is part of Abraaj Capital’s $650 million SMC investment platform, Riyada Enterprise Development (RED). The Fund will target investments in 13-15 businesses, which are expected to achieve tremendous growth and have the potential to expand into new regional and international markets. This will enable Palestinian SMCs across all sectors to strengthen their ongoing development, resulting in substantial job creation, innovation and long-term economic growth in Palestine.

The Fund was able to achieve a strong first closure of $36 million with active support from Fund partners such as PIF (Co-sponsor of the Fund in Palestine), BoP, Cisco, EIB, and Abraaj Capital, who constitute the anchor investors in the Fund, in addition to several other individual partners both in the region and the United States.

Today, the Fund announced its first strategic investment in a Palestinian SMC: Thimar Agricultural Investment Company, a leading fresh herb and produce exporter in Al Oja, in the Jordan Valley. The company was chosen for its growth potential, innovation and strong management team. Thimar will now leverage the regional network of Abraaj Capital, who will support the ongoing growth and development plans of the firm.

The RED platform operates at a regional and country-specific level with investment teams in eight MENA countries, providing economies of scale and the ability to facilitate geographic expansion of its partner companies.

Dr. Mohamad Mustafa, President, Palestine Investment Fund, said: “We at PIF view the partnership with Abraaj Capital in the Palestine Growth Capital Fund as fundamental to our commitment to promoting SMC investments in Palestine. PIF has been supporting this sector through a multi-tier approach, from credit facilitation to loan guarantees. However, we feel that the private equity model introduced by RED Palestine and the regional and global network of Abraaj Capital offers tremendous growth potential for our SMCs. This partnership will further help SMCs to benefit from Abraaj Capital’s management expertise and its regional network, which are critical for their next phase of growth. We commend RED Palestine on its first close and first investment as we look forward to a long-standing partnership.”

Claudio Cortese, Deputy Director General of Operations Outside of the EU at the European Investment Bank, said: “In line with FEMIP’s priorities, EIB’s investment in the Palestine Growth Capital Fund demonstrates the bank’s continued support for SMEs in Palestine, a key sector for growth generation and a cornerstone for sustainable employment generation. We are delighted to continue our partnership with Abraaj Capital in Palestine and other markets in order to help provide the finance and hands-on expertise that these companies need to grow.”

Tom Speechley, Senior Partner, Abraaj Capital said: “We are delighted to announce the first close of the Palestine Growth Capital Fund, which will nurture small and  mid-cap companies in Palestine by providing growth capital and expertise, which are critical for them to compete on a regional and international level. We are equally happy to be here in Ramallah with our Fund Co-sponsor PIF and all our Fund partners from Palestine and overseas. This has been a great synergy of vision, energy and foresight, and this partnership will further integrate Palestine into the regional private equity market through a range of benefits that can be reaped from our global SMC platform.”

The global platform for  SMC investments has rapidly grown within Abraaj Capital and its RED platform. Abraaj Capital recently announced the acquisition of Aureos Capital which, pending certain approvals, would create a truly global emerging markets private equity firm with US$ 7.5 billion in assets under management, a presence in 30 countries across Asia, Africa, Middle East and Latin America and 153 investments managed by a seasoned team of over 150 investment professionals.