SHUAA Partners, the private equity arm of the Middle East investment bank SHUAA Capital, has raised $165 million (€106 million) for the first close of SHUAA Hospitality Fund I, which is targeting $200 million.
Iyad Duwaji, chairman of SHUAA Partners, said in a statement: “In addition to the $165 million in signed commitments, the soft commitments we have received for our regional SHUAA Hospitality Fund should mean we easily reach our stated $200 million target.”
Oliver Schutzmann, head of investor relations at SHUAA Capital, told PERE's sister website, PEO, in May that SHUAA Capital and Rotana, a Middle East hotel chain, have both invested $25 million in the fund and the remaining capital is being raised from institutional investors.
The SHUAA Hospitality Fund I will invest in diversified segments of the hospitality sector in Middle East and North Africa with a focus on countries of the GCC, Egypt and the Levant. The firm plans to invest in the development of a portfolio of five- and four-star hotels, resorts, budget business hotels and serviced apartments to be managed by Rotana Hotel Management Corporation.
The fund made its first investment in May when it entered into a joint venture with Egyptian property developer Orascom for Hotels and Development and Rotana to develop business-budget hotels in Egypt. SHUAA Hospitality Fund I invested $20 million into the joint venture.
The firm will also invest SAR 200 million ($53 million; €34 million) in the SAR 2 billion SHUAA Saudi Hospitality Fund I which the firm is raising. The Saudi hospitality fund aims to develop 17 hotels with 5,000 rooms in Saudi Arabia.
Marwan Firzli, fund manager of the SHUAA Hospitality Fund I, said that the travel industry is growing rapidly in the Middle East and North Africa, and as a result of an increased number of travellers in the region, there is a requirement for “sensible and affordable accommodation, and this new fund plays to this theme.”
Besides the two hospitality funds, SHUAA Partners manages the $200 million SHUAA Partners Fund I and the $100 million SHUAA Frontier Opportunities Fund I.