Pak-Kuwait Investment to set up private equity fund in Pakistan

Pakistan Kuwait Investment Company Limited (PKIC) and R.J. Fleming & Co. Limited on Wednesday entered into a memorandum of understanding (MoU) to jointly set up and manage a private equity fund in Pakistan.

The company is Kuwait Investment Authority's joint venture with the Pakistan government.

The initial seed capital for the fund shall be provided by PKIC and for subsequent rounds, funding will be raised from local as well as from international investors leveraging R.J. Fleming’s global network, PKIC said in a statement.

“The fund will help Pakistani business entrepreneurs access growth capital to scale in the local and regional markets... and upgrade business management skills enabling local or international options for listing or sale,” added Pak-Kuwait Investment.

Private equity (PE) funds, as per CFI (Corporate Finance Institute), are pools of capital to be invested in companies that represent an opportunity for a high rate of return.

“They come with a fixed investment horizon, typically ranging from four to seven years, at which point the PE firm hopes to profitably exit the investment. Exit strategies include IPOs and sale of the business to another private equity firm or strategic buyer,” states CFI.

Samiullah Tariq, Head of Research at PKIC stated, “With recent international institutional participation in the early-stage market in Pakistan and very large conglomerates already served well, there is a gap and opportunity to work with medium- to large-scale companies and with proven reputable business leaders to help achieve their true growth potential.”

Established in 1979 as a joint venture between the Kuwait and Pakistan governments, PKIC has been accredited with many successful investments including the establishment of Meezan Bank in which it presently holds 30% shareholding. It also acquired an equity stake in Planet N, which is a technology platform having investments in over 40 diversified tech startups.

The brokerage house was optimistic that successful investments through this initiative will showcase opportunities in Pakistan and bode well for the overall private equity eco-system of the country.