Abraaj taps Saudi growth

The private equity firm based in Duba has opened an office in Riyadh to tap investment opportunities in the largest Arab economy.

Abraaj Capital, a private equity firm based in Dubai, has opened an office in Riyadh to tap investment opportunities in the largest Arab economy. With Dh22 billion (US$6bn) in assets under management, Abraaj is the largest private equity group outside Europe and North America, "As the largest Arab economy and the centre of the energy world, Saudi Arabia offers substantial investment opportunities," said Amr Dabbagh, the Governor of the Saudi Arabian General Investment Authority, which licensed Abraaj Saudi Arabia Ltd.

The company invests in the growing Middle East, North Africa and South Asia (MENASA) region through buyout funds and special purpose investment vehicles. It holds stakes in more than 25 companies in the MENASA region, including Tadawi, Saudi Arabia's largest pharmaceutical wholesaler and retailer; Air Arabia, the Middle East's largest low-cost carrier; Acibadem, Turkey's biggest operator of premium hospitals; and Al Borg Laboratory, the region's biggest medical-testing laboratory company.

Abraaj will keep a team of eight investment professionals at its Riyadh office, headed by Sari Anabtawi, it said in a statement on its web site on Sunday. "The opportunities to invest in Saudi Arabia are immense given the kingdom's position in the MENA region and its relative insulation from the global economic downturn," said Arif Naqvi, the chief executive of Abraaj. "Whether in transportation, logistics, food, healthcare or education, demand is growing and under-served in terms of existing supply, driven by population expansion and fresh government policies that encourage private investment."

He added that a key priority for Abraaj will be to help its partner companies expand in the region. Since its inception in 2002, Abraaj has made more than 35 investments in 11 countries and exited 20. In 2005, Saudi investors of Abraaj bought a stake in National Air Services, helping it secure the kingdom's first private passenger-airline license. They sold the stake last year, generating an internal rate of return of 52 per cent, the statement said. [e-mail]