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Private equity fund for Palestine SMEs is launched

The Palestine Investment Fund and private equity group Abraaj Capital have completed the first closing of a USD50m private equity fund dedicated to Palestine.

The private equity fund will focus on investing in small and medium-sized enterprises in Palestine across a range of sectors and stages of maturity.

Abraaj is the largest private equity group in the Middle East and North Africa, with offices in six countries.

With a first closing at USD15m, the private equity fund is the first of its kind dedicated to the Palestinian economy.

The initial commitments from the sponsors – PIF and Abraaj – will be supplemented by funds raised from investors in further closings planned later this year.

SMEs account for more than 95 per cent of enterprises in Palestine, 84 per cent of private sector employment and 55 per cent of gross domestic product.

The fund will give access to capital for growth and expansion, as well as leverage managerial, operational, strategic know-how and regional networks. It will also help strengthen corporate governance.

"This is a great vote of confidence for the Palestinian economy highlighting that Palestine is open for business and that the country offers excellent opportunities for investors," says Dr. Mohammad Mustafa, chairman and chief executive officer of PIF. "Investments like these not only give investors – local and international – potentially excellent returns but are crucial in strengthening our economy, supporting innovation and entrepreneurship, building locally based regional platforms, transferring know-how and creating hundreds, if not thousands of new jobs.”

Abraaj, through its dedicated SME investment-management platform Riyada Enterprise Development will manage the fund, which is expected to make 20 to 25 investments over the next four years.

"We are very proud to be a part of this initiative and to be able to contribute to the development of the Palestinian economy in a sustainable way," says Arif Naqvi (pictured), founder and chief executive of Abraaj. "Through this fund we are directly addressing the needs of Palestinian entrepreneurs who, as in other parts of the world, have the capacity to transform the lives of those around them by creating sustainable job-growth and raising living standards. Through it we also aim to provide top-tier returns to our investors."

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