Arqaam Capital acquires Instrata Capital’s Infrastructure Asset Management Business

Monday, March 10, 2014

Arqaam Capital, the specialist emerging markets investment bank, announces the acquisition of the infrastructure asset management business of Instrata Capital, the Bahrain based and regulated asset manager.  The existing portfolio includes power generation and water desalination assets across the GCC.

Riad Meliti, CEO of Arqaam Capital, commented, “The acquisition takes us another step forward with the implementation of our growth strategy in Emerging and Frontier Markets. The development of infrastructure is a fundamental requirement for economic growth in the Middle East, Africa and Southeast Asia. We see significant potential in this sector for Arqaam and our clients, and this acquisition will complement the growth of our Asset Management division.”

The assets are currently owned by the sharia-compliant Bunyah GCC Infrastructure Fund. They include Al Dur Independent Water and Power Project (IWPP) in Bahrain, the Barka 1 IWPP in Muscat and the Salalah IWPP in the South of Oman. The structure and ownership of the Fund will remain unchanged.

The infrastructure sector in the Middle East and Africa has been identified amongst the vital engines of long-term economic growth, with circa US$ 106 billion of annual infrastructure needs through 2020 in the MENA region alone. A number of governments across MENA and Turkey region have made infrastructure a key priority. This is evident from the growing number of development projects planned for modern infrastructure including airports; ports; highways; bridges and high-speed rail facilities; as well as industrial cities and social infrastructure projects.

Arqaam’s latest acquisition maintains the expansion of the bank’s product offering. Arqaam has recently added its Capital Markets Advisory service and has been building up a strong pipeline of IPO transactions.  In addition to expanding its business lines, Arqaam has also enhanced its coverage of Emerging Markets by extending its network into Egypt, Libya and, earlier this year, into South Africa.

Mr Meliti added, “Our Emerging Markets growth strategy is focused on delivering attractive investment opportunities for the benefit of our clients and our shareholders. The acquisition provides our clients with access to a new class of assets and is a demonstration of continued long-term confidence in Emerging Markets.

Key team members joined Arqaam from Instrata as part of the transaction to ensure continuity of management and governance of the Fund.