Gowealthy Capital Limited, an investment company registered with Dubai International Financial Centre, will facilitate the launch of four funds worth $435 million (Dh1.6 billion) in the second and third quarters of 2009, a senior company executive said yesterday.
"We have been retained to facilitate and launch four funds worth $435m in the second and the third quarters. Three will be launched on behalf of listed and private developers," said Peter Penhall, Senior Executive Officer, Gowealthy Capital.
The funds will focus on acquiring assets in Dubai with emphasis on business-to-business transactions. "We are looking at striking a business-to-business deal and purchase of a portion of the development, depending on its nature and the size. It will be a mix of offices, residential, etc so as to diversify the risk. However, we will not be buying land or plots," he said.
The firm has two private trading funds worth Dh38m under management.
Asked what kind of returns will the company offer to investors, Penhall said: "The funds, which will be structured around the class of each asset, will give a very attractive return. It will certainly be well above the financial returns that are available in the general market."
Gowealthy Capital further plans to roll out a fund every quarter, Penhall said. "At this point of time, we are only looking at three funds and that it is our limit unless something exceptional comes up. Our plan is to launch a fund on a quarterly basis."
The company has been attracting lot of interest from other parties who wish to enter or launch real estate funds. "We see a strong interest from people who either are looking at creating their own funds, or looking at appoint asset managers who will assist them in creating funds," he said.
According to Penhall, the funds will not buy any "distressed" assets, and will only target "quality" assets. "We are not looking at buying any distressed assets. Our goal is not to enter the market for a short-term gain, our primary goal is to buy quality, income-producing assets that will show a good healthy capital growth," he said.
Among the four a $110m fund will be targeting the warehousing and distribution facilities. "Dubai World Central is coming on-stream and Dubai is positioning itself as a distribution hub in the Middle East. So it offers us a natural opportunity."
Penhall believes the limiting factor for such a fund is the prevalent short-term leases. "That is not attractive for the fund. So what we intend to do is to structure long-term leases through sale and lease-back opportunities with clients," he added.
Gowealthy Capital has no plans to list any of the funds on Nasdaq Dubai since they lack "critical mass". "They are very small in size and you need a fund of $300m to $500m to make it viable for listing as the cost of servicing is quite high." he said.
Gowealthy operates under a Category 3 asset management licence, which permits it to trade in a number of financial instruments besides operation of collective investment funds.