Hello SearchFunder community!
I’m based in Dubai and I’m currently in the early stages of setting up a search fund to acquire a company here in the United Arab Emirates.
The search fund model is still very much in its infancy here, with a handful of funds having been set up here in the last few years. I’m not sure how many (if any) actual acquisitions have been made through the model.
As such, I presume that one of the key challenges I will face as I put my fund together is educating investors on the model.
It’s one thing to go to an investor when I’ve already found an attractive deal. It’s a completely different thing to ask an investor to commit capital to an extended, full time search that may or may not yield results.
I am now thinking about ways in which I can make it easier for me to educate investors and actually close a fund.
Specifically, I feel that pitching a tight, industry-specific search strategy, possibly one that leverages my professional background, will make these discussions easier.
On the other hand I am concerned that a very narrow focus may also be counter-productive, due to the fact that the UAE is a relatively small market. I may need to go wide to actually find an attractive target.
I suppose that as long as I communicate this with my investors clearly then it shouldn’t be a deal-breaker.
To those of you that have successfully closed search funds in new and emerging markets, where you’ve had to educate investors, what are your thoughts on the above?
What are some of the things you’ve done to make the ‘educating’ part easier and more effective?
Thanks in advance!