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New Palestinian Fund Banks On Growth
Abraaj Capital joins Palestine Investment Fund to launch the first private equity fund focusing on small Palestinian enterprises.
Dubai-based Abraaj Capital, the Middle Easts biggest buyout firm, has teamed up with the Palestine Investment Fund to launch the first private equity fund focusing on small and medium-size Palestinian enterprises.
Theres been a dearth of institutional capital for entrepreneurs, and thats been holding back economic growth, says Tom Speechley, head of Riyada Enterprise Development, the Abraaj subsidiary that will manage the fund. Theres a real opportunity for public-private partnerships in this space.
Achieving high returns could be tough given the restrictions Israel imposes on the movement of Palestinian people and goods across the occupied West Bank, Speechley acknowledges, but he insists that Riyadas experience in the region will pay off. The Palestinian venture is part of a wider effort that seeks to invest $700 million in SMEs across the Middle East and North Africa over four years.
The new Palestinian Growth Capital Fund closed in January at $15 million, including $10 million from the Palestine Investment Fund, which manages $800 million of Palestinian public assets, and $5 million from Abraaj. PIF chief executive Mohammed Mustafa says the fund aims to become an influential minority in companies.
Abraaj is not the only Gulf firm dipping its foot into the Palestinian economy. A Kuwaiti unit of Qatar Telecommunications Co. owns 57 percent of Wataniya Mobile, launched last year as the Palestinian territories second cell phone carrier. A real estate company owned by Saudi Arabias Al-Rajhi Investment Group is developing a $400 million commercial property project in Ramallah with the PIF. And Qatari Diar, a real estate company owned by Qatar, is helping finance the construction of a new town called Rawabi in the hills ouside of Ramallah.