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DIC, First Eastern launch $1bn fund

The Middle Eastern firm takes steps to establish its presence in Asia with the launch of a China-focussed fund in association with a Chinese investment firm.

Dubai International Capital and First Eastern Investment Group, a Hong Kong private equity firm, have launched a $1billion (€632 million) fund to invest in Chinese companies.

The China Dubai Capital fund will be managed by a joint venture between DIC’s Emerging Markets division and First Eastern. The fund is expecting to hold a final close on $1 billion in October 2008 and its first close in May “with at least $500 million from investors predominantly in Asia and the GCC,” according to a statement.

It will target opportunities in Chinese companies and invest in a variety of sectors including infrastructure, resources, healthcare and services.

Growth stage investments will be made in companies that are looking to increase their presence in the UAE and in companies with the potential to be listed on the Dubai stock markets.

Chairman of Victor Chu said in a statement that “this is a unique opportunity to create a win-win situation for China and the UAE. Chinese companies are very attracted by the opportunities arising from the opening up of the Gulf region.”

This fund comes at a time when DIC seeks to increase its investment exposure in the emerging markets of MENA and Asia.

Anand Krishnan, chief operating officer at DIC, who is responsible for its emerging markets division since the abrupt departure of Rabih Khoury, said in a statement that the division is looking to manage assets of more than $5 billion in Asia, the Middle East and North Africa in the next three years. “The development of such single-country focused funds is part of our strategy of diversifying our portfolio of investments,” he said.

First Eastern closed another country-focussed private equity fund earlier this year in March. The Japan China Fund raised more than $100 million from Japanese institutional investors to make co-investments in Chinese companies in various sectors.

DIC, on the other hand, currently manages a Jordan-specific fund and is launching another fund which will focus on investment opportunities in Saudi Arabia.

Last month, DIC bought a minority stake in Singapore’s True Group, a wellness service provider.