DUBAI: Levant Capital, a Dubai-based private equity firm, said it will focus on more mid-market deals that attract global investors after selling its entire stake in power firm ARP Energy to hedge fund billionaire George Soros. Levant, which counts Prince Khaled bin Alwaleed bin Talal Alsaud as chairman, had invested $54 million in APR Energy in 2009. Levant said it sold its entire stake in the company but did not provide a value for the deal. APR, based in Jacksonville, Florida is involved in the temporary power sector and caters to emerging market countries. Soros Fund Management and Albright Capital agreed to invest $250 million in the company.
"Our focus is on grabbing companies that fall under the radar of big investors like Soros," Salameh Sweis, Chief Executive of Levant Capital said in an interview on Sunday. The sale generated an internal rate of return (IRR) of 40 percent to investors, Levant said in a statement. APR Energy more than doubled its sales and cash flows since it invested in the firm. Levant is a partner-owned investment firm with investments of $200 million in several companies, including APR Energy. The firm has achieved aggregate portfolio EBITDA growth of 55 percent between acquisition and year-end 2010, it said.
"We think that there are attractive long-term middle market opportunities for us in the region. Bank lending for mid-market companies is virtually non-existent," Sweis said in the interview. The company expects to exit more of its investments in 2012 and 2013 through selling to international and regional investors, the executive said, adding he does not see a potential listing for any of the companies. British-based Standard Chartered's completed a $75 million mezzanine investment in Bahrain-based Jawad Group recently. Middle East private equity investment plunged by 80 percent to $561 million in 2009, Gulf Venture Capital Association data showed, and deal activity was thin in 2010 too, with investors backing out from capital calls, sellers demanding higher prices and increasing competition from family groups hampering growth.
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