Alrajhi Capital and Arcapita Announced 500 Million Funds

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“Al Rajhi Capital and Arcapita announced launch of USD 500 million real estate income fund” (“Al Rajhi Capital and Arcapita announce launch of USD 500 million real estate income fund”). Both companies will collaborate and, join their skill sets and resources, to obtain efficiency and competitive advantage over other operating real estate funding companies in Saudi Arabia and other Gulf countries. This step was taken following satisfactory performance of Saudi Arabia during economic downturn.” Simultaneously, Al Rajhi Capital and Arcapita announced the completion of the first acquisition for the fund, the largest logistics and distribution center in Riyadh” (“Al Rajhi Capital and Arcapita announce launch of USD 500 million real estate income fund”). “Al Rajhi Capital will serve as fund manager for the fund. Deal sourcing and execution capability will be provided to the fund manager by a newly-formed real estate advisor, jointly owned by Arcapita and Al Rajhi Capital” (“Al Rajhi Capital and Arcapita announce launch of USD 500 million real estate income fund”).

Investors, attracted to booming real estate developments in gulf countries, are also now focusing on less risky and stable economies. Saudi Arabia managed to generate profits during the downturn and, its effective sustenance has reinforced investor’s interest. This has been an advantage for funding agencies in Saudi Arabia. “Arcapita targets sectors that demonstrate strong growth potential supported by fundamental trends such as shifts in demographic trends or changes in supply chain management such as just-in-time delivery” (“Al Rajhi Capital and Arcapita announce launch of USD 500 million real estate income fund”). Strong hold of both companies on the market and the rising market potential gives a base for success of this merger. Al Rajhi Bank is in the process of expanding its operations extensively with a plan of “90 new branches in 3 years” (“Al Rahji Bank to Open 90 New Branches in 3 Years”) and this merger is another step in its expansion. “Our alliance with Al Rajhi Capital is an excellent fit, and Al Rajhi Capital’s extensive network in Saudi Arabia provides an excellent deal-sourcing capability”(“ Al Rajhi Capital and Arcapita announce launch of USD 500 million real estate income fund”).

Works cited

“Al Rajhi Capital and Arcapita announce launch of USD 500 million real estate income fund.”. Arcapita.com. Arcapita, n.p, 2010. Web.

“Al Rahji Bank to Open 90 New Branches in 3 Years”. blog.taragana.com. PR Hub, 2010. Web.

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