Companies listed on AIM can now take a breather. After gaining a reputation of facing investor's ire often resulting in withdrawing capital commitments to them, here's an investor willing to acquire strategic positions in these companies. HBG Holdings, a leading private equity investor and fund management business operating in the Middle East region, has today announced it will acquire strategic positions in companies listed on the Alternative Investment Market of the London Stock Exchange.
HBG, whose shareholders include some of the leading private and institutional investors from the Gulf, will invest from its Cayman based HBG Special Opportunities Fund I - HSOF.
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HSOF, which is the first Shariah compliant private equity fund formed to target growth capital opportunities on AIM, will be opportunistic and focus on listed companies with experienced management and strong growth potential in the MENASA region.
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Commenting on the new fund, Zulfi Hydari, Group Managing Director of HBG Holdings said, “We have decided on the AIM market as a key area of focus for our investment activities after concluding that the current environment is not conducive for small companies to prosper on a public exchange. Although the AIM market has been one of the most successful growth markets in the world, a confluence of factors will force many listed companies into private hands. We are in the fortunate position of being well capitalized and therefore intend to be active investors on AIM over the next few years.”
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HBG has teamed up with former CEO and Deputy Chairman of AIM listed Neutrahealth Plc, Michael Toxvaerd, to launch the HSOF fund.
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Toxvaerd said, “The London team will compliment the wider HBG team consisting of highly regarded business leaders and private equity experts. Now that we have received FSA approval, we are actively setting up our local presence and building the team. As we know the market well and have the expertise to help companies struggling on AIM our deal pipeline is growing quickly.”
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Since its launch in 1995, AIM has become known as the world’s leading market for growth companies with over 2,000 companies.
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Toxveard views the current global financial crisis creating a challenging operating environment for AIM listed companies as an opportune time for picking stakes in them.
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Toxvaerd added, "Many AIM listed companies are suffering from a falling share price, lack of liquidity, limited access to debt, management share options under water
and an institutional shareholder base looking for an early exit. In such circumstances many AIM companies would do better to navigate through this crisis in partnership with a private equity investor.”
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“Since our fund is Shariah compliant, we will need to target strategic positions and limit the amount and type of debt we use, but as the era of careless leverage has ended we are confident that this structure will allow sufficient flexibility to invest and generate alpha returns”, Toxvaerd said.
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HBG is evaluating a number of transactions on the AIM market and will be seeking to
close transactions as the year progresses.
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