Rasmala, a Dubai investment bank, has withdrawn its private equity fund as part of its restructuring efforts.
The fund, which is Sharia-compliant, was launched last year and had targeted investment of US$300 million (Dh1.1 billion). Rasmala will now focus on single deals.
"We felt in this private equity fund investors had less of an appetite but we have completed a very extensive restructuring," said Ali al Shihabi, the founder and chairman of the bank.
"I'm very happy we took the hard decision," he added.
But Mr al Shihabi said the fund was forced to shut down after reaching the $100m mark through about five major investors.
Oman Investment and Finance Company (OIFC), one of the investors involved, yesterday said it would withdraw $5m it had ringfenced to Rasmala's Middle East and North Africa (Mena) private equity fund, in a statement posted on the Muscat bourse website.
It said it made the decision after issues emerged related to the establishment of the fund.
The equity fund is Rasmala's second in recent years. The first was launched in 2000 but liquidated in 2006, said Mr al Shihabi.
Shares in OIFC, which are traded on the Muscat bourse, added 1.5 per cent to 20.9 fils yesterday.
It is the latest move in the investment bank's restructuring, announced last November, after last month's decision to wind down its retail brokerage in an effort to reduce costs.
The company has shut its three retail branches in Egypt, but continues to provide brokerage services to clients online.
It had already embarked on a round of job cuts in November to lower costs by up to 25 per cent.
"The industry needs to pull its socks up and take hard decisions and restructure in the coming years," Mr al Shihabi said.
Although analysts largely perceive the region's private equity sphere to be relatively early in its development, a report from the Mena Private Equity Association released yesterday signalled that the venture capital industry raised a total of $300m last year, a record figure.
