Dubai based investment bank and private equity firm Shuaa Capital, which has an investment in India’s Edelweiss Capital, has reported a net loss of about $101 million (Dh371.1 mn) during the first half of 2008, chiefly as a result of the global financial turmoil. Comparably it had earned a net profit of $35 mn (Dh128.6 mn) during the same period last year.
Only on account of exposure to Lehman Brothers, the company has written down losses of $21.36 mn (Dhs78.6mn) during the first half its current fiscal year. The company had exposure to the structured products and fixed income securities of Lehman Brothers.
Shuaa Capital, a leading securities firm and investment banker in the Gulf region, is a co-investor in Edelweiss Capital along with other strategic shareholders that include GIC, Galleon Group and Lehman Brothers. Shuaa had an unrealised gain of $22.5 mn (Dh 82.5 mn) from the IPO of Edelweiss in the third quarter of 2007. Shuaa is also an investor in Dubai based Baer Capital which has more than 10 investments in India.
Shuaa capital is listed on Dubai Financial Market (DFM) and the Kuwait Stock Exchange (KSE) and is present in six business lines including Principal Investments, Private Equity, and Securities. Early this week, the firm had achieved a successful closing of its fund Mezzanine Investment Partners II Limited (“MIP II”), which it believes is the first Shari’ah compliant investment vehicle providing Mezzanine finance in the GCC (Gulf Cooperation Council).
It also recently announced a share buy back programme for up to 55 mn shares representing 10% of the issued shares. The total client assets under custody and management of Shuaa Capital stood at about $ 2.7 bn as on 30 September 2007.
Last month, US based private equity giant KKR, an investor in Aricent and Bharti Infratel, also posted a loss of $1.1 bn in the first half of 2008 on its investments. Blackstone Group had also reported a net loss of $408 mn for the first half of the year 2008.