First GCC equities fund for int’l investors launched in ADGM

Added 25th May 2016

Eshara Capital, the first investment fund managed out of the Abu Dhabi Global Market (ADGM), has launched its first strategy, providing global investors access to UAE and Saudi Arabian equity markets and upcoming IPOs.

First GCC equities fund for int’l investors launched in ADGM

The investment management firm focuses on listed equities in the Gulf Co-operation Council states (GCC).

Dollar exposure

Eshara’s GCC equities strategy provides exposure to US dollar pegged assets that have AA-rated sovereign backing, yielding 5% or higher.

The firm believes that the fund is launching at an opportune time and will benefit from the continued correlation to the oil price recovery, as well various strategic transformation plans in the region that seek to diversify away from hydrocarbon reliance, boosting the region’s non-oil private sector.  

Interest in the region

The oversubscription of Abu Dhabi government’s bond issuance in April 2016, with pricing circa 100bps over gilts, is testament to the interest in the region from international investors.

Eshara strongly believes that continued capital inflows into the region during 2016 will further strengthen the equity markets, and that it is well positioned to benefit from these flows.

Central to Saudi Arabia’s transformation plan will be the privatisation of Saudi Arabia’s national oil company, Saudi Aramco. This will be a significant global event, with up to $100bn (£68.7bn, €89.4bn) of stock coming to market, increasing the depth and profile of the domestic market and making it home to the biggest company in the world.

Robust and sophisticated

Alex Guy, Eshara’s chief executive and founder, said: “The UAE has a robust and sophisticated equity market and wider financial services sector with highly capitalised banks, a large concentration of institutional and private wealth, and several of the world’s largest sovereign funds.

“In Saudi Arabia, on top of the Saudi Aramco share sale, we are likely to see a doubling of the Tadawul (Saudi stock exchange) market capitalisation as up to 20 new companies, state owned share sales and family businesses list on the stock exchange.

“Being on the ground as we are and having unparalleled access to and knowledge of these sectors will provide our international investors with unique access to these opportunities,” Guy said.

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