JORDAN. Jordan Enterprise Development Corporation (JEDCO), the European Investment Bank (EIB) and Abraaj Capital have jointly announced the launch of the US$ 50 million Jordan Growth Capital Fund to provide long-term capital and institutional support to small and medium enterprises (SMEs) in Jordan.
The announcement was made by H.E. Eng. Yarub Qudah, Chief Executive Officer of JEDCO, Philippe de Fontaine Vive Curtaz, Vice President, EIB, and Mustafa Abdel-Wadood, Chief Executive Officer, Abraaj Capital Limited, at the World Economic Forum’s ‘Special Meeting on Economic Growth and Job Creation in the Arab World’, which took place at the Dead Sea from October 21-23, 2011.
JEDCO, in cooperation with the EIB, started an initiative to foster the development of the venture capital industry in Jordan by launching a tender for the establishment of two venture capital funds to be managed by fund managers in accordance with international best practices. Abraaj Capital was selected to manage the Jordan Growth Capital Fund after passing the evaluation criteria and the due diligence that was conducted based on international best practices.
The Jordan Growth Capital Fund is a sector-agnostic private equity fund with a dedicated team focused on investing in high potential SMEs in Jordan. JEDCO, EIB and Abraaj Capital will serve as anchor investors in the Fund. The Fund will be managed by Riyada Enterprise Development (RED), the US$ 500 million SME investment platform of the Abraaj Capital group.
The Jordan Growth Capital Fund, as part of its investment mandate, will provide growth capital to high impact SMEs in Jordan. In anticipation of the launch of the Fund, RED has completed its first investment in d1g.com, one of the fastest growing Arabic social media and content sharing platforms in the Middle East and North Africa. Over the past three years, the d1g.com network has grown to 1 million subscribers and over 4.8 million unique visitors per month.
Announcing the launch of the Fund, Eng. Yarub Qudah, Chief Executive Officer, Jordan Enterprise Development Corporation, stated, “The Jordan Growth Capital Fund is the first venture capital fund targeting SMEs in the Kingdom. This initiative will play a major role in attracting international venture capital funds and foreign direct investments to invest in Jordanian SMEs. In addition, it will help in encouraging Jordanians to establish their own venture capital funds that will create a new sector specialized in fund management activities.”
JEDCO was established in order to help create, develop and support world-class Jordanian enterprises, whether in industry, agriculture or the services sector. JEDCO’s ultimate goal is to prepare Jordanian companies for global competitiveness, increasing exports and export opportunities to targeted regional and international markets. In doing so, JEDCO seeks to enhance their technical, administrative and logistic capabilities.
Philippe de Fontaine Vive Curtaz, Vice-President of EIB said: “I am delighted that EIB is associated with such an initiative. The fund is expected to make a key contribution to the emergence of the risk capital industry in Jordan with its talent pool and entrepreneurial energy. The successful launch of this fund is the result of over two years of close cooperation between EIB and the JEDCO and it sends a significant message to the market across the region.”
Mustafa Abdel-Wadood, Chief Executive Officer, Abraaj Capital Limited, said: “Small and medium-sized enterprises are the engine of the region’s future economic growth and a vital source of social and economic stability. We are very pleased to announce the launch of the Jordan Growth Capital Fund, which supports the expansion of SMEs in Jordan and accelerates their long-term growth potential.”
“Addressing the region’s employment challenge and fostering the growth of entrepreneurship clearly go hand in hand,” he added. “It therefore makes strategic sense to announce, along with our partners EIB and JEDCO, the Fund launch during this important World Economic Forum meeting dedicated to tackling the region’s twin challenges of sustaining economic growth and increasing the pace of job creation.”
Abraaj Capital has a successful history of investing in Jordan, with its earlier investments including Aramex, the first PE-backed IPO in the Middle East and North Africa, and Maktoob, which was subsequently bought by Yahoo. Abraaj Capital’s current investments in Jordan include the Jordan Aircraft Maintenance Company (JorAMCo).
Jordan Enterprise Development Corporation (JEDCO) was established through decree of the council of ministers on 1 April, 2005 to legally replace the Jordan Export Development and Commercial Centres Corporation.
Stemming from the Government’s keenness on raising the competitiveness and pace of development that enterprises and economic projects were undergoing, Jordan’s Upgrading and Modernisation Programme (JUMP) & the Euro Jordanian Export Programme EJEP were integrated with JEDCO in 2006, thus providing complete and integrated services to beneficiaries.
This was a milestone activity aimed at facilitating enterprise modernisation, development of their efficiency and capacity, therefore enabling them to maximize the benefits of economic and trade agreements signed by Jordan, and enabling them to face the challenges of globalisation and the penetration of non-traditional markets.
As part of its partnership with the European Union (EU), JEDCO is implementing two programmes funded by the EU. Jordan Services Modernisation Programme (JSMP) and Support to Enterprise & Export Development Programme (SEEDP/JUMP II).
JSMP aims at the development of Jordan’s service sector. The programme offers a variety of grants and support services to Jordanian service-sector companies, targeted at enhancing human capital skills, increasing competiveness, creating new domestic opportunities, and expanding exports into international markets. Through its Banking Window, JSMP also provides key advice on banking relationships, financial structuring and credit sourcing. JSMP components also provide for policy support, in a manner that advocates for an enhanced business environment for companies to flourish in.
As for SEEDP/JUMP II it offers grants for the development of agro industry and industrial sectors in Jordan and aims at enhancing the competitiveness of small and medium enterprises working in these sectors, besides creating new domestic opportunities to help Jordanian companies expand into international markets.
Through FEMIP, its financial arm in the Mediterranean, the EIB has since 2002 endeavoured to provide highly practical support for economic and social development in the Mediterranean region with a view to improving living conditions in the partner countries: a commitment which has constantly been reaffirmed over the years, resulting in an overall investment at end-2010 of more than EUR 12bn in support of the Mediterranean countries.
By increasing its business volume to an unprecedented level of EUR 2.6 billion in 2010 – a 60% increase compared to 2009 – FEMIP confirmed to its Mediterranean partners its ability to help them modernise their economies and consolidated its position as the leading development investor in the Mediterranean.
FEMIP plays a pioneering role in the development of the private equity field in the Mediterranean partner countries. The Bank is one of the foremost private equity investors in the region with an active portfolio of approx. EUR 520 million spread over more than 400 investments.
About Abraaj Capital:
The Abraaj Capital group is a leading private equity manager investing in the rapidly growing economies of the Middle East, Turkey, Asia and Africa. Since inception in 2002, it has raised over US$ 7 billion and distributed around US$ 3 billion to investors. Headquartered in Dubai, the Abraaj Capital group employs over 150 people and has a presence in Riyadh, Istanbul, Cairo, Singapore, Mumbai, Karachi, Beirut, Ramallah, Amman, Casablanca and Tunis. The group’s flagship private equity business has helped accelerate and facilitate the growth of over 40 companies in 12 countries in the region, in attractive and fundamental sectors such as healthcare, education, energy, aviation and logistics.
The Abraaj Capital group manages eight Funds: four Private Equity Funds, Riyada Enterprise Development (a Fund dedicated to small and medium enterprises in the Middle East), Kantara (a Fund dedicated to small and midcap enterprises in North Africa), ASAS (an income-generating, real estate Fund) and a 2004 vintage real estate Fund. The Abraaj Capital group currently has over US$ 6 billion of assets under management.
Funds managed by the Abraaj Capital group have holdings in over 35 companies in the region, which collectively employ in excess of 30,000 people, including Air Arabia, the region’s leading low-cost carrier, Acibadem Healthcare Group, Turkey’s largest privately owned hospital operator, and Al Borg Laboratories, the Middle East’s largest privately owned medical testing laboratory business.
In 2011, Abraaj Capital was ranked the largest private equity firm in emerging markets worldwide by Private Equity International. In addition, Abraaj Capital has won many regional and international awards, including the ‘Middle Eastern Private Equity Firm of the Year’ for six consecutive years, awarded by Private Equity International.
Abraaj Capital Limited, a member of the Abraaj Capital group is licensed by the Dubai Financial Services Authority (DFSA).