DOHA: Corecap, the regional investment and advisory firm specialized in alternative investments, announced today the launch of its first $150 million Corecap Islamic private equity Fund I (Cipef I).
Cipef I will fund Sharia compliant Private Equity investments in the Middle East and North Africa (Mena) region via equity participation and via a unique Sharia compliant mezzanine structure. The fund will acquire majority stakes in stable and mature businesses through funding growth capital, MBOs, MBIs, LBOs and recapitalizations. As one of its kind, Cipef I achieves a breakthrough in the sphere of Islamic Finance, making it the first Private Equity fund that offers a Sharia compliant mezzanine structure worldwide. This innovative structure overcomes one of the main traditional funding barriers for the growth of the Islamic private equity Industry. The announcement was made at the Qatar Economic Forum.
Corecap’s solid shareholder base is led and represented on the board by Chairman Sheikh Mohamed Bin Jassem Al Thani, former minister of economy and commerce in Qatar, Vice Chairman Rohit Walia, CEO and managing director of Bank Sarasin-Alpen (ME) LTD and Alpen Capital (ME) LTD, leading Swiss private and investment banks, and by CEO and board member Khaled Hassan Rashed and Managing Director Omar Adel El Maghawry both representing Core Partners, an investment management firm.
H.E. Sheikh Mohamed Bin Jassem Al Thani, Chairman of Corecap, stated: “Regional economies have witnessed unprecedented growth in recent years resulting in vast excess liquidity which is seeking suitable investment opportunities. At the same time, the Islamic Finance industry is undergoing a tremendous transformation both in terms of market breadth and depth on a regional as well as on a global scale. Corecap has succeeded in structuring a truly unparalleled fund tailored to meet the increasing appetite for such sophisticated and ethical Islamic investment products.
As of today, the global Islamic Finance industry is valued at $800 billion, growing by an estimated 15-20 percent per annum.
Khaled Hassan Rashed, CEO and board member of Corecap, said: “We are proud to be announcing today Cipef I, the first of our family of Islamic private equity funds. The fund will invest in Sharia compliant businesses across a wide array of industries. Cipef I is a close-ended 6 year fund targeting a minimum internal rate of return of 25 percent per annum and open to institutional and high net worth and investors with a minimum investment requirement of $3 million. The fund will be governed by an independent Sharia board comprising prominent Sharia Scholars from the region. He added: “Cipef I’s uniqueness lies in offering innovative Sharia compliant funding through equity participation and mezzanine structure, thus providing our investors with access to a diversified asset class base and offering Sharia compliant businesses diverse sources of growth capital. The launch of Cipef I stems from our belief that Islamic private equity is one of the most suitable answers to the ever increasing demand for structured Sharia compliant investments. We see Private Equity as a natural fit for such investments as it is based on investment in the real economy and sharing risks and rewards through partnership. Our team has identified an eminent pipeline of transactions that fits the investment criteria of the fund and caters to the huge demand and appetite of our investors. We believe that Islamic private equity is set to outgrow conventional Private Equity in the Mena region within the next 5 years and is estimated to cross $41 billion by 2011. We are committed to playing a leading role in the development of Islamic private equity in the industry as a whole.
Omar Adel El Maghawry, managing director of Corecap, said: “The fund is in line with Corecap’s ‘Invest & Grow’ strategy which focuses on mid to late stage companies in the Mena region. Once an investment is identified, Corecap conducts a thorough due diligence to determine its value creation strategy and a clear exit route for value realization. Corecap creates value in businesses through focused post-acquisition management strategies including operational and financial re-engineering, strategic re-definition, spin-off of non-core assets and establishing consolidation platforms for growth via acquisitions. The interests of shareholders and management of investing companies are aligned through various incentive schemes including stock options, thus sharing the value created upon exit.
The solid backing of our shareholders, investors, board members and the unique mix of our team’s background, as well as its collective and diverse 115 years of experience in the fields of Private Equity and Islamic investments, position Cipef I at the forefront of the Islamic private equity industry.