SHUAA launches $200 million ‘Financing Opportunities Fund’

Business Bureau, Gulf Today

SHUAA Capital psc (DFM: SHUAA), the leading asset management and investment banking platform in the region, announced that it has launched a USD 200 million ‘SHUAA Financing Opportunities Fund’ targeting special situations in the GCC. The fund has already attracted a total of USD 68 million in commitments from investors.    

Following SHUAA’s recent success in the private credit space in deploying and returning in excess of USD 250 million to investors and generating mid-teen returns of c. 15% in addition to USD 3 billion of structured and raised funding across all portfolio companies, the company is excited to be launching its first dedicated financing fund.

The key objective of SHUAA Financing Opportunities Fund, a closed ended fund with a four-year tenor, is to generate income yield and preserve capital, through a well identified mandate covering targeted and strategic investments in senior, mezzanine and unitranche Sharia-compliant financing for corporates and developers operating in the GCC region.

SHUAA Financing Opportunities Fund is the fourth fund to be announced by SHUAA in 2020. The firm continues to attract capital from investors, and has raised over USD 140 million in the last 3 months, demonstrating the Company’s strength, expertise and track record In the region.   

Jassim Alseddiqi, Chief Executive Officer of SHUAA, said: “Against the backdrop of a changing regulatory and business environment, several project deals and assets in liquidity-hit sectors are unable to progress or fulfil certain obligations, particularly due to the challenges posed by COVID-19.”  

“Despite the challenging market conditions for borrowers, SHUAA believes that there are attractive opportunities in the GCC market that will generate appropriate risk-adjusted returns for its investors, in key sectors including healthcare, real estate, hospitality, construction and shipping.”

Alseddiqi, added: “Opportunities in the current market environment include short term recapitalisations, growth capital, bridge loans and acquisition financing. SHUAA’s investment team has hence identified several needs for this type and level of financing in projects across the GCC region and is looking to provide them with innovative alternative investments including last-mile funding, something in which we have successfully engaged since the last financial crisis. We look forward to jumpstarting these key projects towards their successful completion and continuing to support their future goals as our economy moves into a recovery phase.”

The ‘SHUAA Financing Opportunities Fund’ investors base is expected to include regional and international limited partners, including regional non-banking financial institutions, family offices, investment companies and high net worth qualified individuals (HNWI).

Mustafa Kheriba, Deputy Chief Executive Officer and Group Head of Asset Management of SHUAA Capital, said: “The Fund is targeting mid-teen returns in the private debt market with stringent underwriting criteria to ensure downside protection for our investors. From having managed private credit investments through various cycles, we have developed a deep understanding of evaluating credit risk and ensuring successful exits.”

SHUAA Capital is a leading asset management and investment banking platform, with c. $13 billion in assets under management and with offices throughout the Middle East and the United Kingdom. SHUAA Capital is recognised for its strong track record and pioneering approach to investing through a differentiated, innovative and global product offering focused on public and private markets, debt and real estate.

The asset management segment, one of the region’s largest, manages real estate funds and projects, investment portfolios and funds in the regional equities, fixed income and credit markets; it also provides investment solutions to clients, with a focus on alternative investment strategies. The investment banking segment, mandated to lead several sukuk issuances for a total of more than USD 600 million during the past year and a half, provides corporate finance advisory, transaction services, private placement, public offerings of equity and debt securities, and structured products, while also creating market liquidity on OTC fixed income products. The firm is regulated as a financial investment company by the Emirates Securities and Commodities Authority.