Private Equity in Middle East

1. Private Equity in Middle East October 2005

2. Istithmar Overview • A major investment holding company based in the UAE • Focuses on Private Equity, Alternative Investments, and Real Estate • Set up in June 2003 with an initial capital pool of USD 2 Billion • Form part of the Group comprising Dubai’s Ports Customs & Free Zone Corporation, Nakheel, DMCC, and Tejari • Key mission: to earn an exceptional return for its investors while maintaining due regard for risk • Investment based on its “I” investment philosophy namely Ideas, Inquiry & Integrity • Investments over USD 850 Million to date Private Equity in Middle East

3. Private Equity in 2005 • Private equity continues to be one of the major economic drivers of the world’s economy • Represents approximately 7.5%* of global asset allocations • Continues to play a major role in restructuring of underperforming assets worldwide • Analysis suggests as much as USD 20 billion allocated to funds focusing in the Middle East Region * Source: Private Equity: Catalyst for Economic Growth in the Middle East Region Private Equity in Middle East

4. Investment Focus to Middle East • Private equity picking up pace in Middle East, as Arabs prefer to keep their assets home due to: • Lackluster performance of US and European stock markets • Out performance by home markets • Increased scrutiny by foreign governments post 9/11 • Increase in oil prices and liquidity thereon • Region has been a source for PE firms that raises capital in the region and invest in US and Europe • Currently, market is relatively small, with approx. USD 250 M of funds managed by PE firms • Managers view that the market is on the verge of major growth • Shuaa Capital and National Investor to add USD 250 M to the pool • Abraaj to add USD 500 M to the pool • Injazat Fund’s additional fund of approximately USD 100 M • Players like Istithmar making large scale investments • Other players sprouting in the region • Managers view about USD 600 billion of assets likely to be denationalized in the Arab world in the next 10 years resulting in an opportunity for PE players • Incentive for companies to partner with PE investor enhanced by success of local stock market Private Equity in Middle East

5. GCC GDP & Surplus • GCC countries have benefited from increase in oil prices which in turn has helped increase in budget surpluses Source: EIU Report. Data for 2004 Private Equity in Middle East

6. Future for Regional Managers • Movement of Capital from foreign based firms to locally managed firms • Closer Management • Deploy in local markets and international • Estimated that as much as US$ 20 billion raised in dedicated funds devoted to private equity in next five years • Finding management talent • Fund Managers • Corporate Managers • Globalization of Financial Markets • Standard for managers will have to emulate that of international competitors • Will have a suite of products (Local vs, International; Traditional vs, Alternative; Islamic vs traditional) Private Equity in Middle East

7. Istithmar means Investment. Ideas. Inquiry. Integrity