News

Delta Capital, the private equity* arm of Dubai-based Delta Partners, has launched the US$75-million MENA Telecom Fund in Bahrain.



Thanks to a “very strong pipeline of investment opportunities”, the fund is to be increased to $100 million by the end of March.



“The fund’s investor base represents a select group of blue-chip investors from around the GCC (Cooperation Council for the Arab States of the Gulf)”, says Nezar Al Saie, the fund’s chairperson. “The investor base also includes strategic investors who have a broader interest in the telecom sector, and who will invest alongside the fund in certain opportunities.”



The fund is focusing on investing in already established unlisted companies, including network engineering and roll-out, call centres, distributors, and alternative telecom service providers.



Markets across the GCC countries are the priority, but the fund will pursue opportunities right across the region, especially Jordan and Turkey, but also Algeria, Egypt, Lebanon and Morocco.



Delta Capital is part of the Delta Partners group, a telecom advisory and investment firm in the MENA region with more than 60 professionals. The new fund will seek majority or significant minority stakes in companies, investing on average $8-12 million per investment in new firms as well as in restructuring and consolidating existing operators.



The new fund intends to use Delta Partners’ industry experience and expertise “to extract above average returns from its investments - an annual rate of over 25% - through close collaboration with its portfolio companies”. The investment will usually be for seven years, with an initial three-year period.



Sources: Mena Report via Al Bawaba, Jordan, http://www.albawaba.com/en/countries/UAE/210812, posted 14 March ’07; Middle East & North Africa Telecommunications Blog, 25 October 2006, http://www.menacomms.com/index.php/2006/10/25/75m-equity-fund-targets-mideast-telecom-market



*Private equity funds hold investments in companies that are not listed on a public stock market. They usually control management and, on acquiring a company, often bring in new management teams. The aim is to pump up the company’s financial value for quick resale or merger – often with scant regard for jobs and conditions.