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Leeds United Owner GFH Capital Buying London Property, Plans Tech Fund
GFH Capital, the Dubai-based private equity firm that bought English football club Leeds United last December, is snapping up central London property in search of attractive yields and may launch technology funds with a U.S.-based partner as it seeks to capitalize on business startups in the GCC, deputy chief executive David Haigh said.
Mr. Haigh, who is also managing director of Leeds United, said GFH Capital has been buying London properties with values between $15 million and $50 million. It is currently looking at purchasing a pair of properties for about GBP20 million, he said.
Those investments aim to exploit good prospects for returns on luxury flats in central London, Mr. Haigh said. As it does with many of its investments, GFH Capital is seeding the purchases and then bringing in co-investors to take up part of the equity. GFH Capital is a subsidiary of Gulf Finance House, a Bahraini firm.
"Most of the investment banks are looking towards London to buy high-end real estate because it creates good yields, I think, and there's a limit to the amount of people who can acquire it," Mr. Haigh said, adding that the company would in some cases buy property to generate income and in other cases would buy, develop and sell.
"There's two we're doing at the moment and we're always looking for more," he said.
High-end residential real estate values in central London have climbed steadily despite the financial crisis and slower economic growth across Europe. In a report in July, the property firm Knight Frank raised its forecast and said prices were expected to go up 6% on the year.
In addition to its London property strategy, GFH Capital is looking at launching private equity funds that seed startups in the region, Mr. Haigh said. The company has a history of technology investments through its Injazat Technology Fund, a $50 million venture capital vehicle started in 2001. Most of its investments have since been sold.
"We've been looking at having a very early-stage fund and a late-stage growth fund, essentially replicating Injazat but making it bigger," Mr. Haigh said. "There is some great potential and there are a lot of new people coming here, some early stage and growth stage. For the early stage we wanted to bring in expertise from the U.S."
The investment in Leeds, he said, was doing well. GFH Capital bought the club from Ken Bates for GBP17 million and additional payments based on the club's reaching the Premier League. It was an undervalued asset, Mr. Haigh said, and GFH saw an opportunity in helping resuscitate the club and get its fans re-engaged. Leeds currently plays in the Championship league.
"We could see immediately there were small things and medium things and large things we could do that would automatically put that club back on an even keel," he said. Attendance is already up, he said, and the club is aiming to reach the Premier League soon.
"Of course everybody wants to get to the Premier League, because that's where the money is, but only three of them (promotions) happen every year," he said. "I think we've made a good start. We'd like to do it this season. Will we? I don't know, but I think within two, yes."
