Abu Dhabi Catalyst Partners becomes anchor investor in Olive Rock Partners

The Abu Dhabi Global Market-based private equity fund was founded by former Gulf Capital partners last year

FG81FD View of new business district at Abu Dhabi Global Market square (ADGM) on Al Maryah Island in Abu Dhabi United Arab Emirates. Alamy

Olive Rock Partners, a private equity firm based at Abu Dhabi Global Market, secured investment from Abu Dhabi Catalyst Partners.

ADCP, a joint venture between sovereign investor Mubadala Investment Company and Falcon Edge Capital, is becoming an anchor investor in Olive Rock Partners' debut fund. The size of the investment was not disclosed.

Olive Rock was co-founded by former Gulf Capital partners Muhannad Qubbaj and Abdullah Shahin last year and is in the process of raising its debut fund. It is targeting a $350 million fundraise but could increase the size, depending on demand. It expects to close the fund by the first quarter of next year, Mr Qubbaj told The National.

The private equity market in the region "was still an evolving asset class" over the past decade and a half, but is becoming more mature as more banks, fund administrators and specialist legal practices support the sector, he said. An increasing diversification away from oil revenues by governments and a willingness to support private investments in the region "have led to the opportunity we are in today", he added.

"Today, we think there is a tremendous need for alternative capital here in the region and we feel that going forward company owners will understand the benefit of bringing on board smart third-party capital," Mr Qubbaj said.

"Going forward, there's a lot of opportunity to develop the market from an alternative investing perspective."

The private equity market enjoyed another stellar year in 2020. Although Covid-19 restrictions meant activity ground to a halt in the second quarter, deals and exit values rebounded in the second half and finished 8 per cent higher than in 2019. Of the $592 billion of buy-out deals completed last year, $410bn was in the second half of the year, according to Bain & Company's 2021 Global Private Equity Market report.

The amount of funds raised by the industry fell to $989bn from 2019's record of $1.09 trillion, but was still the third-highest on record.

“With [a] high level of dry powder and robust credit markets, 2021 deal markets promise to be incredibly busy as investors seek to make up for lost time,” the report said. “Looking at January 2021 data, deal value is 184 per cent higher than the averages seen for that given month in the past five years.”

“Abu Dhabi Catalyst Partners is excited to be collaborating with Olive Rock Partners to grow their business in the ADGM,” James Munce, chief operating officer of Abu Dhabi Catalyst Partners, said.

“Olive Rock Partners is an experienced regionally focused investment manager, adding its depth of expertise to the ADGM ecosystem. We are confident that Olive Rock Partner’s presence in the ADGM will support the growth of the alternative asset management industry in the region.”

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