ADIH targets $300m first close for hospitality fund

The Hospitality Development Fund hopes to raise $1bn to invest in development projects, hospitality and entertainment companies in Asia and the MENA region.

The Abu Dhabi Investment House (ADIH) hopes to raise $1 billion for a Sharian-compliant private equity and real estate fund focused on the hospitability sector in the Middle East, North Africa and Asia.

The Hospitality Development Fund plans a first close on $300 million this December and is targeting institutional investors from the MENA region and South East Asia. The fund’s minimum projected internal rate of return is 20 percent, according to an ADIH statement.

“The fund will invest in several hospitality sub-sectors such as airlines, tourism, accommodation, food services and leisure,” Rashad Janahi, an ADIH managing director, said in the statement.

It will also invest in development projects as well as existing hospitality and entertainment companies, according to Janahi.

According to the United Nations World Tourism Organisation, countries in the MENA and South Africa region have seen some of the fastest tourism growth.

ADIH Investment Placement Team is the fund’s placement agent. Bahrain’s Gulf Finance House and  Ithmaar Bank are its advisers.

The Hospitality Development Fund is one of three investment vehicles launched by Vision, a partnership between ADIH, Gulf Finance House and Ithmaar Bank. The other two vehicles InfraCapital and AgriCapital are focused on focused on infrastructure and agriculture respectively. InfraCapital is an investment bank while it is unclear how AgriCapital is structured.

ADIH was planning to launch a fund focused on distressed assets, an official told the Khaleej Times this March. ADIH did not respond to requests for comment at press time.