Gulf Capital announced last week that the IFC is making a $25 million commitment in a follow-on investment to the alternative investment manager’s second credit and mezzanine fund. Gulf Capital Credit Opportunities Fund II, which is targeting $250 million with a $300 million hard cap, held a first close at $175 million in January is year.
The fund aims to provide financing solutions to private equity sponsors and non-cyclical, growth middle market companies with revenues between $25 million and $250 million in the Middle East and North Africa, Sub-Saharan Africa and Turkey. The fund’s strategy is to prioritize companies that operate in consumer-focused growth sectors and that are defensive in nature such as healthcare, education, power, water, food and beverage. The existence of strong management teams and financial track records are also key criteria for the fund’s investment decisions.
Commenting on the investment, Atul Mehta, the IFC’s private equity and venture investing global head for TMT said “This is our second commitment to Gulf Capital’s private debt business and we look forward to partnering through this…fun and through co-investments in order to provide much needed capital to SMEs.”
It’s expected that the new fund will make transactions between $15 million and $35 million in size and in up to 12 investments over its 10-year life. The company’s first credit and mezzanine fund, which closed at $221 million in 2013, is now over 90% invested, having financed 8 companies in the healthcare, education, power, oil and gas, risk management, facilities management and telecoms sectors. The fund recently generated a 33% IRR on a recent exit and is on track to achieve its overall 15% IRR target.