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Abu Dhabi-based fund manager launches first ever GCC equities strategy for international investors

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Eshara Capital, the first investment fund managed out of Abu Dhabi Global Market (Abu Dhabi’s International Financial Centre), has launched its first strategy, providing investors with access to the UAE and Saudi Arabia equity markets and upcoming IPOs. 

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

The fund is launching at an opportune time to 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 thus boosting the region’s non-oil private sector. 

The oversubscription of Abu Dhabi Government’s bond issuance in April 2016 with pricing of c.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 USD100 billion 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.

Eshara Capital’s investment team is based on the ground in Abu Dhabi and has deep local networks and close links to sovereign wealth funds, large family offices and institutions in the region, and is partnered with global blue-chip investment partners (Bank of America Merrill Lynch, Julius Baer and Deloitte) to provide best in class investment practices and security for its clients.

Alex Guy (pictured), Eshara’s CEO and Founder, says: “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 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.

“This is a huge milestone for us also because of Eshara’s heritage which dates back to 1962 when my grandfather set sail with the ‘British Signal’, a 35,000 ton BP oil tanker, carrying the first oil to be exported from the UAE, marking the start of Abu Dhabi’s rapid rise as a major player in the hydrocarbons industry and bringing us to where we stand today”.

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