Positive Practice in Private Equity
HBG facilitates the flow of investment capital from the Gulf region, in particular Saudi Arabia, into private companies throughout the Middle East, North Africa and South Asia region. The firm focuses primarily on growth capital investment opportunities to generate superior returns for its investors. Since its inception, HBG has worked with a growing number of private and institutional clients from the Arabian Gulf to acquire target companies.
HBG’s positive approach to private equity ensures that the firm is ideally placed to support companies in the growth phase of their development. With its formidable team of business leaders, access to substantial financial resources and its influential network of professional partners, HBG is committed to empowering and partnering private enterprise in its goal to achieve competitive, profitable and sustainable futures.
PRIVATE EQUITY HBG invests directly in target companies as well as in private equity funds focused on investing in private companies in the Middle East, Central Asia, South Asia and Africa:
1. Direct Investments:
These investments are undertaken from the firm’s balance sheet targeting mid-size companies with strong management and with the potential to expand regionally and internationally. HBG invests in companies that can benefit most from its operational and strategic know-how as well as its financial resources during the hold period.
2. PE Fund Investments:
The firm provides seed funding to specialist platforms investing in the wider region and co-manages in partnership with specialist fund management teams.
HBG adopts a disciplined investment strategy of acquiring target companies and creating value through financial and operational enhancements, financial restructuring, acquisition and mergers. The company enforces strict financial discipline, rigorous analysis and valuation techniques in order to build a high quality portfolios and targets the following types of businesses:
Growth businesses: Acquisition of companies with strong cash flow characteristics and potential to expand regionally and internationally.
Underperforming businesses: Acquisition of mature companies with dominant market positions but facing challenges in operations, strategy or capital structure.
Asset based businesses: Acquisition of individual or portfolio of real estate and infrastructure assets that can be utilized to generate strong future cash flows.
The firm is continually assessing investment opportunities in its deal pipeline, most of which are identified through its stakeholders and network of contacts in professional firms and industry. The team follows a disciplined investment process, evaluating each opportunity, ensuring that it meets the defined investment criteria and risk profile and pursues only the most compelling transactions.
The firm takes advantage of a variety of financing structures by using optimum leverage to fund its acquisitions and consequently maximizing returns to investors whilst not imposing excessive repayment or operational restrictions on portfolio companies. HBG arranges debt financing through leading financial institutions and underwrites equity itself.
In the post investment period, the team measures performance against specific financial metrics, and adopts value-focused approaches to portfolio management. The HBG philosophy is to promote entrepreneurship by empowering its fund managers and the management teams of its portfolio companies whilst maintaining central oversight through simple yet rigorous policies and targets.
The firm presents its shareholders with additional opportunities to co-invest in transactions and also seeks co-investment from third party private and institutional investors.
The enduring relationships and trust that are built in this mutually beneficial process are the foundation of HBG’s success.