In 2007, Investcorp launched a fifth line of business, Gulf growth capital (GGC). Countries in the Arabian Gulf region are undergoing unprecedented economic transformation, driven by strong oil revenues, a far-reaching economic diversification program and a demographic transition, which is creating strong growth opportunities. This private sector-led economic transformation, coupled with an improved and more liberalized business environment, is creating extraordinary growth opportunities in the region.
Gulf growth capital will invest up to $1 billion in its first phase in 'build' and 'buyout' opportunities, principally in the Arabian Gulf region. The business may invest opportunistically in the wider Middle East and North Africa region. GGC will target a growing pool of buyout opportunities sourced from corporate divestures of non-core assets, family business divestures and privatizations. The business will also create joint ventures in partnership with reputable regional and international corporations in order to establish globally competitive businesses based on the region's comparative advantages and demographics.
GGC will specifically target three industrial clusters:
- down stream hydro-carbons and intermediate and derivative industries;
- medium-size infrastructure and manufacturing; and
- service sector businesses
Our core investment thesis is that the economic transformation in the Arabian Gulf region has created opportunities to establish 'higher-value', larger scale businesses that require complex and sophisticated technologies and management capabilities. We see a strong role for an experienced financial sponsor that can bridge local market opportunities with global expertise and help create leading-edge business enterprises in the region.
With our principal investment track record, value creation experience and network of relationships in the region dating a quarter of a century, we are well positioned to participate in the economic diversification of the region. We can also help create higher-value industrial and service companies that will benefit from the disciplined value creation programs applied by experienced financial sponsors.
The funding and infrastructure building effort for GGC are at an advanced stage. The nucleus of the investment team is in place, including the head of the business and 12 team members. The team is based in Bahrain and integrated fully within Investcorp's corporate management structure.