Daman launches Iraq focused private equity initiative

Daman launches Iraq focused private equity initiative

Daman Iraq Opportunity Fund
Press Release
6 January 2003
Daman launches Iraq focused private equity initiative

New Fund in line with Daman’s ongoing regional investment strategy
Daman Asset Management has launched a new investment product, the Daman Iraq Opportunity Fund, a private investment initiative aimed at providing investors with the opportunity to participate in the international reintegration and reconstruction of Iraq.
Mr. Shehab M Gargash, Daman’s Director said, “ The Daman Iraq Opportunity Fund was launched with the view that the potential for growth in Iraq is very significant, and that the country can benefit a great deal from infrastructure investment. Iraq potentially
represents a large, educated and skilled market and we expect pent-up demand to be freed in the future. This growth in demand will lead to economic growth that will generate above-market returns on investment in retail and commercial projects.”

The Fund will initially identify investment opportunities that are permissible given the current international legal consensus surrounding commerce with Iraq, and plans to increase its scope of activity as and when sanctions against the country are
lifted. Upon the lifting of sanctions against Iraq, growth is expected to occur rapidly. With Iraq’s oil industry restored to full capacity and able to sell to international markets freely, the additional revenue could spur up to 25% GDP growth per annum, according to Daman’s research.

Daman Iraq Opportunity Fund (the Fund) is a discretionary private equity initiative targeting investment opportunities presented by the imminent economic reconstruction of Iraq and is presented to a small group of informed private investors strictly on an
invitation basis only.

Daman Iraq Opportunity Fund
The principal objective of the Fund is to seek out investment opportunities that will yield high returns to investors within Iraq whilst not conflicting with international laws and United Nations sanctions. The Fund has an authorized share capital of US $50 million although it is not raising this amount during the early part of the Fund’s life but rather shall seek investor funding as and when required by identified investment opportunities, presenting the would-be investors with new subscription periods from time to time. The life of the Fund is set at five years and is extendable by a further five years.

The minimum required subscription per investor has been set at US $100,000. This allows investors to participate in a unique investment opportunity with a relatively low amount of money.

Daman has previously launched the Daman UAE Value Fund, a closed-ended, offshore mutual fund focused on the UAE stock market. It was launched on July 1, 2001 and has since achieved growth of 33.41% and has distributed an uninterrupted quarterly dividend
to its investors.

Iraq represents an imminent opportunity within the Middle East region, with a variety of potential opportunities from a widely anticipated reconstruction drive that shall foster an attractive environment for investors.
Political, social and economic change is imminent in Iraq. Having faced two decades of economic volatility, valuations throughout Iraq are low presenting a sea of unexplored options within this young and underdeveloped emerging market.
Iraq’s 1979 oil production figures are estimated at some 3.1 million bpd compared to its more recent production of 1.6 million bpd through the United Nations humanitarian oil-for-food program. A return to past full capacity would bring revenue of $700-750 per person per year, representing per capita GDP growth of between 25-30%.

Sound revenues from oil are expected to replenish the economy and the populace, providing a new wave of redevelopment that will be second to none in the Arab region. Having faced ongoing troubles, Iraq is in dire need of new infrastructure to carry it through the twenty-first century and bring it once again into the Middle East community.

The Iraqi population is estimated at 24 million, a large amount of which is educated, skilled and trained. This provides local human resources at affordable levels with a keen desire to rebuild what once was a hub within the region. This paired with a return of human talent from the West to their homeland provides strong synergies for an investment environment. Finally, the anticipated dramatic
Daman Iraq Opportunity Fund rise in disposable income provides a promising climate for foreign direct investment initiatives such as the Daman Iraq Opportunity Fund Mr. Shehab M Gargash stated, “the Daman Iraq Opportunity Fund is ultimately an
exciting concept in line with Daman’s ongoing objective of seeking new opportunities within the Middle East region for its clients. Such opportunities are carefully and conservatively weighed for their risk / reward potential before they are presented.”

Daman Asset Management
Daman Asset Management is a joint partnership by a group of prominent UAE investors to meet growing demand for a professional, full-service financial services company in the region. Building on the strengths of its management team – local and international investment management, including both discretionary and fund management services, placements of private equity, and brokerage and research services – Daman aims to bring global experience to the region, and bring regional investors a world of investment and asset management options.

For more information, please contact Mohammed Sulaiman
Daman Securities Tel: +971.4.332.4140 Fax: + 971.4.332.4240
Email: [email protected]