UAE's GII launches $100m debt fund to support high-growth GCC and Indian companies

The fund will target companies in sectors including consumer, health care, education, logistics and technology

GII co-funder and co-chief executive Pankaj Gupta said the company aims to provide diverse opportunities. Photo: Gulf Islamic Investments

Gulf Islamic Investments, a UAE-based Sharia-compliant alternative investments manager, has launched a $100 million venture debt fund to support fast-growing companies in the GCC region.

GII Debt Fund-I will focus on sectors including consumer, health care, education, logistics, technology, and technology-enabled businesses in the region, the company said in a statement on Tuesday.

The fund will also seek investment opportunities in high-growth Indian companies looking to expand in the GCC and internationally.

“We actively seek companies that are backed by established venture capital investors and work with these companies to provide venture debt and build the business,” Mohammed Al Hassan co-founder and co-chief executive of GII, said.

“This presents a new opportunity for our investors to diversify in different high-growth asset classes with attractive returns.”

The VC ecosystem in the Middle East and North Africa is growing amid the boom in start-ups, particularly in sectors such as technology and digitisation.

Venture capital funding for start-ups in the region rose 20 per cent annually to more than $2.3 billion in the first three quarters of 2022, putting it on track to potentially surpass the total investments attracted in 2021, according to a report by data platform Magnitt.

Egypt, the UAE and Saudi Arabia retained the top three positions in terms of both funding value and number of deals, capturing more than 75 per cent of overall Mena investments, it said.

Globally, venture debt is a fast-growing asset class for companies looking to use the capital for team building, working capital and capital expenditure requirements. In the US, the venture debt industry is 15 per cent to 20 per cent of venture capital investments over long term. The market so far is underpenetrated in the GCC and India region, GII said.

“One of our principles is to provide diverse opportunities, and GDF-I truly reflects that as it provides income and growth to our investors,” Pankaj Gupta, co-chief executive of GII, said.

“GII has developed a robust underwriting approach based on our experience working with high growth companies across developed and emerging markets.”

In June, GII, which has about $3 billion in assets under management, fully acquired Anglo-Gulf Trade Bank, a digital trade finance lender, from Mubadala Investment Company, for an undisclosed sum.

AGTB is a digital bank licensed by the Financial Services Regulatory Authority of the Abu Dhabi Global Market, and is described as the world’s first digitally enabled trade bank, GII said at the time.

In May, the company said it plans to invest close to $530 million for a majority stake in Saudi Arabian healthcare operator Almeswak, as part of its push for a more than threefold increase in its asset to $10 billion in the next five years.