Gulf Capital mulls up to eight exits and investments in 2019

The Abu Dhabi private equity company is eyeing investments in technology

Gulf Capital, one of the largest private equity companies in the Middle East with more than $3 billion of assets under management, plans to exit from up to four of its investments and make a similar number of new deals this year, its chief executive said.

Typically, the company's equity spending in terms of new investment deals is in the range of $50 million to $100m, Karim El Solh, who is also co-founder and managing partner at the Abu Dhabi company, told The National on the sidelines of Global Financial Summit in Dubai on Monday.

“I think in 2019, we are looking at three to four exists, and three to four investments,” he said. “It’s a nice balance as it shows we have reached maturity and we are exiting as much as we are buying into new companies.”

There are several investment opportunities being assessed by Gulf Capital as the company looks to assign its capital and it is equally busy dealing with interested buyers for exits, Mr El Solh said.

For its exits, Gulf Capital is getting a lot of interest from buyers in the Far East who want to buy assets in the Arabian Gulf markets to be near the region, and ultimately expand to Africa, he said, without identifying the assets the company plans to sell this year.

Gulf Capital has made five technology investments. Last May, it acquired a stake in the Saudi financial technology company Geidea, an electronic payments provider, for more than 1 billion Saudi riyals (Dh980m).

The number and value of private equity deals in the Middle East and North Africa has declined steadily since 2014 to 17 deals totalling $350m in 2017, according to figures compiled for The National last September by alternative assets data provider Preqin. Between 2014 and 2015, the number and value of deals more than halved, as a drop in oil prices hit the region's hydrocarbon-dependent economies, impacting multiple industries including private equity. The value of exits fell to $52m in 2017, from $1.9bn in 2014.

Gulf Capital, however, is betting on the new sectors including technology for growth, said Mr El Solh, who is optimistic about prospects in 2019.

"We are looking more in the e-commerce space, new industries like entertainment and tourism in Saudi Arabia. If you pick the right sector you will find growth, and it's not all doom and gloom [in the Gulf]," he said.

Other than technology, Gulf Capital is keen on investing in the region's healthcare sector and is evaluating some opportunities.

“The healthcare industry has proven itself to be extremely resilient and we didn’t see a dip and that gives us confidence to put more money in the sector,” he said.

The company, which primarily invests in the six-member economic bloc of GCC, is also interested in deals in Egypt, the most populous Arab nation, and in Jordan. It may also tap the market again for funds in 2020.

“We are still halfway through the [existing] funds so maybe next year we will come back to the market,” Mr El Solh said.