(MENAFNEditorial) Global Capital Management Limited, the Alternative Asset Management subsidiary of Global Investment House, announced today that Global Opportunistic Fund I (GOF I), one of the five private equity funds it manages, has completely exited its investment in DEPA Limited (Depa Group), one of the world’s leading interior contracting companies, which is listed on the Dubai Financial Market (DFM) and the Alternative Investment Market (AIM) in London.
GOF I, which closed in August 2005, invested primarily in late stage private equity opportunities within the GCC region. This fund invested USD14.7million in Depa Group in 2005 and 2006.
Mr. Rajiv Nakani, CFA, Managing Partner at Global Capital Management said, "GOF I was one of the initial and leading investors in Depa Group. We have liquidated the fund’s investment in Depa Group in a few tranches to optimize returns, taking advantage of the superior year-on-year performance of Depa Group. I am happy to state that we have achieved an attractive return for the investors of GOF I, producing an IRR of 23% IRR from this investment."
Depa Group has shown remarkable growth over the last few years and even in the most challenging times it reported a 60% increase in revenues and a 25% increase in net profits for 2009 compared to 2008. Although the company reported a net loss of AED103million during the first half of 2010 due to the impact of an interim claim (AED82million net profit before the claim effect), it remains healthy and is in a strong position to pursue exciting growth.
The management has diversified its business geographically in such a manner that the impact of economic slowdown in the UAE has been mitigated significantly. The customer base is broad and no single customer accounts for more than 9% of revenues. As of August 2010, the order book stood at AED2.4 billion with an increasing amount being derived from outside Dubai.
Mr. Nakani stated, "Across all private equity funds we manage, our investment philosophy is to look for businesses which are resilient in nature and managed by a core team that is focused on increasing efficiencies and flexible to adapt to newer challenges. Depa Group is one of the classic investments that has delivered as per expectations."
It is noteworthy that GOF I holds stakes in several other listed and unlisted investments in its portfolio, amounting to an aggregate value of USD214million (as at 30 September 2010). The fund is in exit mode and the fund manager aims to conclude exits by Q2 2012, which should ensure exit proceeds flow back to GOF I investors over the next eighteen months.
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