These funds will operate in accordance with the principles of Sharia – Islamic law.
Each of the two funds is targeting US$1 billion in equity.
Sponsors of the funds include Dubai Islamic Bank; United Gulf Bank, the Bahrain-based investment banking arm of the KIPCO Group of Kuwait, and the Jeddah-based Islamic Development Bank (IDB), each of which has committed $50m to each fund, as well as Kuwait Finance House (KFH), which will only participate in the Global Energy Fund with a $50m contribution.
Subsequent closes will attract other blue chip institutions from the GCC, Europe, North America and Asia.
“The first close of Millennium Private Equity’s TMT and Global Energy funds is a milestone in the development of the private equity industry in the Middle East. It is a unique pan-GCC platform, sponsored by prominent institutions from the UAE, Kuwait and Saudi Arabia. Millennium Private Equity’s family of funds (seven in total) is among the largest private equity initiatives in the Middle East and differentiates itself by its sector-specific approach. The five other funds in the portfolio include Financial Institutions, Natural Resources, Infrastructure, Real Estate, and Health & Education, which will be launched in the near future,”
said Keba Keinde, CEO of Millennium Finance Corporation and Chairman of Millennium Private Equity.
“Some of the most successful and respected financial institutions from across the region are sponsoring these funds, reflecting their confidence in the sector-specific strategy, the investment and value-enhancing operating skills of the funds’ managers, and the growing exit opportunities that the maturing regional and broader Islamic capital markets offer. We welcome these eminent institutions to this private equity initiative, express our gratitude for their investment and embrace their active involvement,” said Izzet Güney, Senior Executive Officer, Millennium Private Equity.
The Global Energy Fund seeks to capitalize on the many opportunities arising from the booming demand for energy in emerging Asia, particularly in China and India.
In particular, it will leverage its domicile in Dubai, which is at the geographic midpoint between resource-hungry Asia and resource-rich Africa, with its many deposits of hydrocarbons, minerals and other precious commodities.
The TMT Fund will look to create value from the untapped growth opportunities offered by the low penetration, but high demand, of telecoms, media and technology products and services in the Middle East, Africa and Asia, as well as the ability for these markets to leapfrog to the latest technologies.
Fund investors and portfolio companies will benefit from the superior deal flow and unrivalled industry insights provided by the two funds’ exceptionally qualified advisory boards.
The Global Energy Fund’s advisory board includes Spencer Abraham, former US Energy Secretary; Richard H. Matzke, former Vice Chairman of ChevronTexaco and current Lukoil Director, and Jean-Pierre Tirouflet, former Chairman and CEO of Rhodia.
The TMT Fund’s advisory board includes Martin Pompadour, Chairman of News Corporation Europe; Bruno Ducharme, former founder and CEO of TIW, and Emre Berkin, former Chairman of Microsoft Middle East and Africa.
The funds will aim for a gross internal rate of return in excess of 20 percent a year and have a life of seven years.
Each portfolio company investment will be between $20m and $100m and have a horizon of two to four years.
Millennium Private Equity’s first investment was a $100m stake in Infratel, the infrastructure subsidiary of Bharti Telecom, the leading mobile operator in India.
The investment was the result of a partnership with the Investment Corporation of Dubai, which was the sole investor into the investment vehicle managed by Millennium Private Equity.
Millennium Private Equity is regulated by the Dubai Financial Services Authority and is based at the Dubai International Financial Centre.
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