IJARA Capital Partners Limited (“IJARA”), a private equity firm licensed in October 2016 has launched the Pakistan’s first ever locally-hosted Private Equity and Venture Capital Fund (PE & VC), namely Pakistan Emerging Market Fund–1 (“Fund”) worth of $100 million from eligible investors by private placement.
“Such alternate investment vehicles will stimulate economic growth by providing capital from local and overseas investors to those companies having limited access to capital from banking channels or capital markets,” said Farrukh Ansari, Chief Executive Officer (CEO) – IJARA in a statement. He emphasised the importance of long term investments through Private Equity Funds.
He said the growth capital would generate strong economic activities in the country by creating new jobs significantly, building and enhancing capacity, attracting foreign exchange and stimulating exports of the country.
“The Fund is designed to give accredited local and foreign investors easier access to private equity investment opportunities in the emerging economy of the country,” he said, adding that the Fund seeks to offer broad exposure to a portfolio of private equity investments in the Healthcare, Infrastructure, Real Estate, Information Technology and other high growth yielding sectors with an objective of earning attractive returns.
He said that the Fund would be managed by experienced professionals of IJARA which comprises of seasoned businessmen, advisers and turnaround specialists.
The Fund’s CEO further said that for the capital providers, it would be a unique investment opportunity because such alternate investment asset classes provide diversification due to limited correlation with the capital markets. He said that the Fund would have a finite life and eventually it would exit mainly through secondary market sale or through Initial Public Offering (IPO) and thus reaping high returns to its investors. Moreover, at the exit through IPO, a new improved company would be added in the stock exchange and thus providing the opportunity for general public to also participate in the company’s growth thereby increasing the efficiency and development of capital markets. He said that due to the efforts of government and law enforcement agencies, investment climate of Pakistan was improved tremendously and with CPEC, Pakistan would emerge as one of the best destinations for local and foreign investment.
“To encourage such private equity investments in Pakistan, Ministry of Finance and FBR have facilitated private equity by allowing tax incentives to Fund investors and investee companies,” he said.
Ansari also appreciated the role of Securities and Exchange Commission of Pakistan (SECP) which has been pivotal for the growth of private equity in Pakistan. The Fund has been approved by SECP under the newly promulgated Private Funds Regulations, 2015. The development of locally-hosted PE & VC Funds in Pakistan is the outcome of efforts of Chairman SECP and his dedicated team who are pushing forward the economic development agenda of Government of Pakistan.
“This Fund is only the beginning and IJARA will launch more funds in the future,” he concluded.