SHUAA Capital Partners with Key Capital to Launch First Secondary VC Fund in MENA

Strategic Partnership for Investment Opportunities

Dubai-based SHUAA Capital, a leading regional financial services firm, has partnered with Key Capital Ltd to launch the first secondary venture capital fund in the Middle East and North Africa (MENA) region. This initiative aims to capitalize on the growing demand for technology investment opportunities, with a targeted fund size of $50 million.

Under this partnership, SHUAA Capital will serve as the investment advisor for the Key Fund I LP, which focuses on acquiring secondary stakes in high-growth technology companies through off-market transactions. The fund’s strategy is designed to provide liquidity to early investors while offering a unique entry point into mature assets, with the goal of generating accelerated returns and a diversified portfolio.

Key Capital has already completed two investment transactions as part of the fund’s formation, which is structured as a limited partnership registered in the Abu Dhabi Global Market. This partnership comes at a critical juncture for the venture capital ecosystem in the MENA region, which has seen annual venture investments grow from $1.1 billion in 2020 to an anticipated $3.8 billion by 2025, according to Magnitt.

Market Dynamics and Investment Strategy

The surge in venture capital investments has not been matched by adequate liquidity pathways, highlighting a structural need for specialized secondary solutions. Key Capital estimates the regional secondary investment market to be worth over $1 billion, with global secondary deal volumes reaching a record $240 billion by 2025, as reported by Jefferies. This growth underscores the increasing importance of this asset class among institutional allocators worldwide.

SHUAA Capital will provide advisory support that includes capital formation, strategic relationships, and capital markets execution, leveraging its established institutional platform to enhance Key Capital’s specialized secondary investment strategy and its deal network. This collaboration aligns with SHUAA’s strategy to expand its asset management platform and support top fund managers in the region.

Nabil Al Rantisi, CEO of SHUAA Capital, emphasized the transformative potential of the secondary investment sector in the MENA region, stating that the partnership with Key Capital reflects a shared vision of addressing the urgent needs within the venture capital landscape. Al Rantisi noted that Key Capital possesses a specialized team with a proven investment track record, which complements SHUAA’s expertise.

Insights from Key Capital

Basil Muhtadi, Managing Partner at Key Capital, expressed confidence in the maturation of the venture capital ecosystem in MENA, highlighting the urgent need for a specialized liquidity layer. Muhtadi stated that the time has come to launch their secondary investment strategy, aiming to provide stakeholders with organized exit pathways while enabling investors to access high-quality technology assets at a more balanced entry point.

He also noted that SHUAA Capital’s institutional platform and regional presence will enhance their ability to develop this strategy and expand their investor base in this asset class. The partnership is expected to facilitate the first closing of the fund soon, marking a significant milestone in the region’s investment landscape.

Frequently Asked Questions

What is the size of the new secondary venture capital fund?

The fund aims for a size of $50 million.

What types of investments will the fund focus on?

The fund will focus on acquiring secondary stakes in high-growth technology companies.

What is the significance of this partnership for the MENA region?

This partnership addresses the urgent need for liquidity solutions in the growing venture capital ecosystem.

Who will manage the fund?

SHUAA Capital will act as the investment advisor for the fund.

When is the first closing of the fund expected?

The first closing of the fund is expected to occur soon.