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Gulf Capital Plans New Private Equity Fund of Up to $750 Million

Gulf Capital, the Abu Dhabi-based investment company led by former Donaldson, Lufkin and Jenrette leveraged buyout executive Karim El Solh, is planning to raise as much as $750 million to start a third private equity fund.

The firm, which targets controlling stakes in energy, health-care and education companies, expects to market its GC Equity Fund III from early next year, El Solh said yesterday in an interview in Abu Dhabi. It expects to raise between $550 million and $750 million from investors including Asian sovereign wealth funds and U.S. financial institutions, he said.

Gulf Capital expects to invest 75 percent of its $553 million GC Equity Fund II by year-end, from about 50 percent now, allowing it to start marketing a third fund. The firm, set up in 2005 to attract global investors to the Gulf region, invests on average $50 million to $75 million in each company.

“We’re big investors in oil and gas and our investments in defensive sectors like healthcare and education have been profitable,” he said. “We’d like to continue that investment strategy. We like to influence our portfolio companies.”

The fund is “exploring options” to exit its investment in Gulf Marine Services, an assembler and operator of vessels for the offshore oil and gas industry, including an initial public offering in London, Singapore or Abu Dhabi, he said.

The firm is also considering a potential IPO for its Metito Holdings Ltd. power and water business, he said.

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net

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