Gulf Capital closes $250m private debt fund

LAGOS (Capital Markets in Africa) – UAE-based alternative investment firm Gulf Capital has closed a $250 million (AED925m) debt fund, it said on Monday.

The Gulf Credit Opportunities Fund II is Gulf Capital’s second private debt and mezzanine fund.

The fund, which follows a similar investment and diversification strategy as its predecessor (Fund I), will invest in mid-market companies across the Middle East, Turkey, and Africa region that generates over $5m (AED18.35m) in earnings before interest, tax, depreciation and amortisation (EBITDA), and revenues of between $20 million (AED73.40m) and $250 million (AED917.50m), the firm said.

The average investment size is to range between $10 million (AED36.70m) and $30 million (AED110.10m), and is expected to finance between 10 and 12 small-to-medium-enterprises (SMEs) over the lifetime of the fund.

Gulf Capital’s Fund I closed in January this year and has invested in eight industries spanning power, education, oil and gas servicing, business services, industrial, healthcare, and telecoms.

“Private debt in the region is becoming an attractive asset class for investors seeking a consistent, high-cash yield,” Dr. Karim El Solh, CEO of Gulf Capital, said in a statement.

“Investors recognize the value of our proprietary sourcing and active investment approach to generate absolute, risk-adjusted returns that Gulf Capital’s private debt fund has been able to achieve irrespective of the business cycle.”

Sovereign wealth funds, international institutional investors, regional insurance companies, foundations, and family offices have invested in Fund II, according to Gulf Credit Partners, manager of Gulf Capital’s private debt business.

For example, the International Finance Corporation, a member of the World Bank Group, has raised its commitment to $25 million, up by 25 percent from its previous commitment to Fund I. Other repeat investors increased their commitment by up to 50 percent, the statement claimed.