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Private capital fundraising ‘set to improve from 2021’

January 12, 2021
finance & economy

Recent tepid interest in Mena private capital fundraising is set for a marked about-face starting from 2021, said the head of NBK Capital Partners, a premier alternative asset management firm.

“There is a significant and persistent shortfall of Mena private capital penetration relative to other emerging markets,” added Yaser Moustafa, Senior Managing Director of NBK Capital Partners.

“From 2021, we believe those investment flows will begin to change course, with greater global investor confidence shown to the outstanding investment opportunities currently on offer in the Mena market, particularly in education, healthcare, food and beverage, consumer, and industrials and technology.”

Moustafa said his firm is ideally suited to thrive in the current macroeconomic climate based on four key criteria: team experience, willingness to take risks, flexible thinking, and access to capital.

“NBK Capital Partners is, culturally, an extremely entrepreneurial group of men and women. We are not passive investors; we are active, hands-on people who are quite passionate about the businesses in which we become involved,” said Moustafa.

The NBK Capital Partners team is the subject of a December 2020 business school case study being published and promoted by the prestigious, US-based Massachusetts Institute of Technology’s Legatum Center for Development and Entrepreneurship at the MIT Sloan School of Management, entitled: NBK Capital Partners and the Role of Private Capital in Emerging Markets.

“The NBK Capital Partners’ team has set the bar for regional alternative investment fund management. The time and effort the team expends to ensure portfolio companies create solid returns for their funds is quite remarkable,” said Dina Sherif, Executive Director of the Legatum Center who, along with researcher Regie Mauricio, authored the case study and spent considerable time interviewing the NBK Capital Partners’ management team, as well as those of several of its portfolio companies.

Sherif pointed out in the case study that “a high-touch” approach that established new management teams, created new processes, and introduced new standards was critical to increasing the value of the [NBK Capital Partners’] investments. This philosophy extended to private credit and real estate, as teams worked with clients to formalize their operations to better service their debt and lease payments.

“Acting as ‘patient capital,’ NBK Capital Partners doubled down on its efforts to ensure that its portfolio created returns for investors in an uncertain environment.”

The company employs a “defensive growth” strategy, meaning that it seeks to minimize risk exposure and enhance returns for its investors.

Moustafa added: “Our team is always learning and growing with each investment. That is how we believe we are best able to create and extract value from the companies in which we are involved. Effective risk management is always front of mind.”

Because of their successful investment thesis and institutional identity, NBK Capital Partners was able to weather the challenges that whittled the regional private capital community from 50 firms in 2005 to a handful in 2020, the case study said.

NBK Capital Partners is currently closing the fundraising for its third private credit fund.

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