BNP Planning $300 Million Gulf PE Fund

DUBAI (Reuters) – French bank BNP Paribas (BNPP.PA) may raise up to $300 million for a private equity fund active in the Gulf Arab region to tap opportunities arising from the financial crisis.

BNP is looking to raise $150 million in the first phase by mid-October and possibly a further $150 million later, its regional chief executive, Jean-Christophe Durand, told reporters late on Monday.

Private equity in the Middle East is expected to pick up again by the year-end, as banks become more willing to lend.

In addition, local governments are pouring billions of dollars in transport, infrastructure and healthcare projects, offering opportunities for private equity firms to start investing again.

BNP will contribute 25 percent to the fund, while the remainder will come from large regional investors, Durand said, adding the fund “will be opportunistic and GCC focused,” expecting an uptick in merger and acquisition activity across the world’s largest oil exporting region.

BNP’s fund is the latest signal private equity is gaining traction in the Gulf.

On Monday, Abu Dhabi-based investment bank National Investor said it was setting up a $150 million Islamic fund, while Qatar’s QInvest said last week it had launched a $200 million fund with Fortis Bank Nederland [FORTH.UL] to take advantage of falling asset prices in the shipping sector.

With its local headquarters in Bahrain, BNP Paribas is one of the biggest players in fixed income and project finance regionally. (Reporting by Nicolas Parasie; editing by John Irish and Dan Lalor)