Li’s PineBridge Targets Middle East Acquisitions to Boost Growth

PineBridge Investments, the money manager controlled by Hong Kong billionaire Richard Li, plans to make as many as six acquisitions in the Middle East, Turkey and Africa this year.

“The investment that is being made in the Middle East is probably one of the most important growth initiatives for PineBridge,” Talal Al Zain, the firm’s chief executive officer for the region, said in a March 4 interview in Manama, Bahrain. He declined to say how much PineBridge plans to invest, while describing the potential deals as “aggressive and meaningful.”

PineBridge wants to invest in real estate, education, health care, retail, telecommunications and oil and gas services to capitalize on economic growth and a rising population in the Middle East. Since establishing its regional headquarters in Bahrain 14 months ago, the firm has been involved in one deal, the sale and leaseback of a private school owned by GEMS Education.

PineBridge, which was the investment arm of American International Group Inc. before being sold to Li’s Pacific Century Group during the financial crisis, is targeting faster growing emerging markets. Of the 22 countries where PineBridge has an office, 17 are in emerging markets.

“Right now we are in the build-up stage,” said Al Zain, who also sits on PineBridge’s global executive committee and is former CEO of Bahrain’s sovereign wealth fund Mumtalakat. “Eventually, the Middle East will be a major contributor to the global business.”

Turkey Opportunity

Economic growth in the Middle East and North Africa region is projected to be 3.8 percent in 2014 by the International Monetary Fund, almost double the rate in advanced economies. That gives the region a compelling case for investment, said Al Zain.

“We are one of the few global private-equity firms with a presence in the Middle East,” said Al Zain. “PineBridge’s philosophy as a firm is to have local and regional private equity teams, that is why we have a private equity presence in the region.”

PineBridge also sees investment opportunities in Turkey despite a corruption scandal engulfing the government that has led to the currency sliding more than 8 percent against the dollar, and the Borsa Istanbul 100 Index to fall by almost 17 percent since the beginning of December.

“Events like those in Turkey only create opportunities for investors,” said Al Zain, adding that PineBridge is close to finalizing a deal in the country. “It definitely does not turn us away.”

In Africa, the company is looking at private-equity opportunities in infrastructure, manufacturing and industrial companies from its office in Johannesburg.

The firm also has offices in the U.S., Mexico, Chile, Hong Kong, India, the U.K. and Japan.