MerchantBridge and UBS AG have formed a 50/50 joint venture to make private equity investments in the Middle East. Each firm has committed an initial $40 million, and hope to raise a total of $500 million.
We are delighted to announce that MerchantBridge, a direct investment and private equity company focused on the Middle East, has joined forces with UBS Global Asset Management, one of the world’s leading asset managers, to form a 50/50 joint venture called MerchantBridge-UBSPrivate Equity. The joint venture will develop and manage a series of private equity investment strategies focused on the Middle East region. The joint venture will be based in Dubai.
The joint venture’s first strategy will focus on making direct investments in a broad range of sectors including oil and gas services, financial services, and light and medium industries. It expects to initiate this strategy in first quarter 2009, targeting USD 500 million in investments and seeded with USD 80 million, USD 40 million from each joint venture partner.
Announcing the joint venture, Basil Al Rahim, Founder and Managing Partner of MerchantBridge and newly appointed CEO of MerchantBridge-UBSPrivate Equity, said: “The Middle East region is experiencing tremendous expansion supported by sound macro-economic fundamentals. This expansion is offering important opportunities to invest in private businesses across the region.”
“Despite the challenging global environment, we believe the Middle East region is well positioned for strong growth. By the end of 2006 there were USD 1.9 trillion in foreign assets in the six Gulf Cooperation Council countries alone(i), and at least USD 2.6 trillion in oil earnings is expected over the next five yearsi. Many of the region’s leading corporations will continue to seek business opportunities within their borders and regionally, which will allow private equity to play an important role at a time when other sources of capital are becoming increasingly scarce,” continued Al Rahim.
John Fraser, Chairman and CEO of UBS Global Asset Management and also Chairman of UBS Saudi Arabia, commented: “The recent success of our infrastructure business has provided a great platform for us to expand our alternative offering into private equity. The success of UBS’s existing relationship with MerchantBridge in the Middle East meant they were our ideal choice when we decided to expand into this asset class in the region.”
“The new joint venture combines our global resources and direct investment experience with MerchantBridge’s local knowledge and private equity track record. It cements what will be a long and successful partnership and supports the growing demand from global investors for private equity investments, particularly in the Middle East region,” he continued.