The Private Equity asset management team at Global Investment House announced that it has completed the exit of two of its managed funds, the Private Equity Fund and Global Opportunistic Fund I, along with co-invested clients from Al Rayan Holding Company.
The transaction was completed on the 12th of July 2012 and represents 82% stake.
The Funds launched Al Rayan in 2007, and through acquisitions and organic growth created a network of 6 schools with over 10,500 registered students, making it the largest educational group in Kuwait offering educational services from kinder garden to high school. In late 2009, the Company went through a restructuring program of its operations which included several organizational and business growth initiatives through the leadership of a team from the Private Equity arm of Global. As a result, between 2009 and 2011, revenues, EBITDA, and operating profits grew at a compounded annual growth rate of 12%, 26% and 73% respectively.
Nasser Al Khaled, Global-appointed Chairman of Al Rayan, has indicated that the firm, in a very short period of time, has become a leader in the education sector in Kuwait and ran successfully schools under multiple systems, including the Kuwaiti National Arabic curriculum, the English National curriculum, the curriculum of the Indian Central Board of Education, and the Pakistani Board of Education. Al Khaled adds: "We are very proud of the fact that we have created a transparent and professionally run organization with proper governance systems and structures in a sector dominated by family run businesses and that we have been successful in creating an extremely capable management team that can continue to grow and take this company forward."
On the exit route taken, Al Khaled noted that "Given the challenging capital market conditions, especially at the Kuwait Stock Exchange, a public listing would not have yielded an attractive exit as a trade sale to a respected and education-focused strategic buyer." Adding, "It was also very important for the fund management team to choose a buyer who shares the same values and is fully capable to continue and build upon the significant work that has already been done in Al Rayan."
Rajiv Nakani, the Head of Alternative Asset Management at Global Investment House commented on this exit by saying "we are extremely delighted to have completed this exit and provided our investors with the liquidity particularly sought after in this economic environment." He adds: "We have been very successful in creating the largest educational platform in Kuwait and building great value in the firm in the past few years through a very active managerial approach and we believe that it is the right time to hand this Company over to a buyer who will benefit from creating additional value through further strategic synergies." He continued: "our investment in Al Rayan was not only a financial investment but also a social investment where we have placed the foundations for excellent educational entities in Kuwait and we intend to capitalize on our team's experience in this sector to roll out products targeting opportunities in social infrastructure."
With the exit from Al Rayan Holding Company, the Private Equity asset management team at Global Investment House has completed 16 full and partial exits since 2010, making it one of the most active private equity houses in an extremely challenging time for the industry. The private equity funds managed by Global Investment House have returned more than $238m to its investors since 2010, excluding any dividends, mostly through trade sales.
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