Merchant Bridge launches fund in Iraq

Private equity firm MerchantBridge, which has more than $1.5 billion of investments in Iraq, has launched the Mesopotamia Fund to further invest in Iraqi equities. MerchantBridge also plans to close a deal of up to $100 million in Saudi Arabia next year.

(Reuters)– Global private equity group MerchantBridge has launched an equity fund in Iraq and plans to close a deal of up to $100 million in Saudi Arabia in early 2011, its chief operating officer said on Monday.

Eric le Blan said the firm, with over $1.5 billion worth of investments in Iraq, has also launched the Mesopotamia Fund to invest in Iraqi equities.

“We are investing in the future of Iraq through the stock exchange. We have great expectations for the fund especially in the long-term,” he told Reuters at an industry conference in Abu Dhabi.

The fund is targeting about $10 million initially, he said, adding that an earlier construction materials fund in Iraq closed in February this year.

MerchantBridge with investment interests operating from Iraq, Lebanon, United Arab Emirates and the UK has done 10 private equity deals so far valued at $3 billion. The firm has exited four of these, he said.

Early this month, the firm finalized a $220 million investment in Iraq’s Karbala cement plant with French cement maker Lafarge.

After a quiet period of two years, private equity deals are returning to the market in the region but of a smaller size, said Blan.

“There is potential but it is harder to access debt and the environment is challenging,” he said.

Still, MerchantBridge is eyeing deals aggressively in the region in the short-term.

“In 2015 we will be much stronger in Iraq and will see a lot of better size deals in Abu Dhabi, Qatar and Saudi Arabia,” he said. (Reporting by Stanley Carvalho; Editing by Jason Benham and Louise Heavens)