The Palestine Investment Fund (PIF), a publicly owned investment fund which aims to strengthen the Palestinian economy through key strategic investments, and private equity group Abraaj Capital announce the first closing of a US$50 million private equity fund dedicated to Palestine.
The private equity fund will focus on investing in small- and medium-sized enterprises (SMEs) in Palestine across a range of sectors and stages of maturity. Abraaj is the largest private equity group in the Middle East and North Africa, with offices in six countries. With a first closing at US$15 million, the private equity fund is the first of its kind dedicated to the Palestinian economy. The initial commitments from the sponsors - PIF and Abraaj - will be supplemented by funds raised from investors in further closings planned later this year.
SMEs account for more than 95 per cent of enterprises in Palestine, 84 per cent of private-sector employment and 55 per cent of gross domestic product. Although SMEs are a critical backbone of the local economy, the sector is underserved in terms of access to capital and degree of institutionalization. The private equity fund will give access to much needed capital for growth and expansion, as well as leverage managerial, operational, strategic know-how and regional networks. It will also help strengthen corporate governance.
"This is a great vote of confidence for the Palestinian economy highlighting that Palestine is open for business and that the country offers excellent opportunities for investors," said Dr. Mohammad Mustafa, Chairman and Chief Executive Officer of PIF.
"Investments like these not only give investors - local and international - potentially excellent returns but are crucial in strengthening our economy, supporting innovation and entrepreneurship, building locally based regional platforms, transferring know-how and creating hundreds, if not thousands of new jobs," Dr. Mustafa said.
© 2010 Mena Report (www.menareport.com)
