Shuaa Partners, the private equity arm of Shuaa Capital, said it had closed the Shuaa Hospitality Fund I with total commitments of $165 million (Dh605.5m).

As of June 30, the Fund has received interest in excess of $240m and more than $165m in aggregate capital commitments, and hence anticipates the remaining $3m will be fully subscribed before second and final closing.

The Shuaa Hospitality Fund I is the third private equity fund sponsored by Shuaa Capital. Shuaa Partners manages the $200m Shuaa Partners Fund I which has made five investments within the GCC and exited two, achieving an average of 51 per cent gross internal rate of return (IRR).

Shuaa Partners also manages the $100m Frontier Opportunities Fund I which has completed its first investment and is dedicated to diversified investments in Lebanon, Syria and Jordan.

Shuaa Hospitality Fund I offers a diversified exposure to the hospitality sector in the Middle East and North Africa, with a primary focus on the GCC, the Levant and Egypt.

It will invest into the development of a diversified portfolio of five- and four-star hotels, resorts, serviced apartments and budget business hotel properties, which will be managed by Rotana Hotel Management Corporation.

Shuaa said that 200m Saudi riyals (Dh194.5m) will be allocated to the Shariah-compliant Shuaa Saudi Hospitality Fund I, aiming to develop 17 hotels with 5,000 rooms in the Kingdom of Saudi Arabia.

Shuaa Hospitality Fund I has also signed a joint-venture with Orascom Hotels Holdings to initially develop five Centro budget business hotels in Egypt, the joint venture has an initial capital of $40m of which the Fund contributes $20m.

The remaining balance of the Shuaa Hospitality Fund I will invest in select hospitality opportunities across the Mena markets, in which Shuaa Partners and Rotana have already begun to identify potential investments.

"In addition to the $165m in signed commitments, the soft commitments we have received, for our regional Shuaa Hospitality Fund, should mean we easily reach our stated $200m target.

"Investor appetite has been strong given the opportunity to benefit from the booming tourism and travel industries in the region, investing in a diversified portfolio instead of taking exposure on single-country or stand alone property, and securing an identifiable exit. With the advent of the summer season, we opted to close and allow institutional investors to take the time needed for their internal process," said Iyad Duwaji, Chairman of Shuaa Partners.