SHUAA halts PE investments save hospitality fund

Dubai-based SHUAA Capital has declared it would make no new investments with its two private equity funds, focusing instead on exiting the three companies it holds within their portfolios. It also said it would not seek to raise a new fund in the near future. The bank said these moves did not equate to a move away from private equity.

SHUAA will make no more investments from its two private equity funds SHUAA Partners and Frontier Opportunities, which together have commitments of $300 million, according to a spokesman.

The bank will not be raising a new private equity fund in the near future due to macro-economic conditions making it very difficult to raise capital, the spokesman said, adding that it “may choose to do that” in the future. 

The SHUAA Partners fund has two investments remaining, and Frontier Opportunities still has one. The bank will now concentrate on looking at exit opportunities for these portfolio companies. However, a spokesperson said that they were all publically-listed companies and the equity markets in the region have been hit very hard. An immediate exit therefore seems unlikely. 

The bank also has another fund which it will continue to invest from. The fund buys land in Saudi Arabia on which to build hotels. The SHUAA Saudi Hospitality Fund is $533 million in size, and has made three land acquisitions so far. A spokesperson stressed it was not a real estate fund, and that the bank had a separate real estate operation that operates largely in an advisory capacity. 

It has been a troublesome year for the bank, with its employee headcount dropping by 11 percent including the departure of its private equity head, Anis Bibi, in May this year. Last month chief executive Sameer Al Ansari also left, with head of securities of SHUAA’s brokerage arm, Walid Shihabi, following closely behind.