Foursan technology partners short-listed to manage Jordanian government fund

Foursan technology partners is one of three bidders to manage a $150 million Jordanian government fund that will take advantage of the current privatisation initiative and merge fragmented industries in Jordan

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By  Massoud Derhally Published  June 9, 2001

A year and half ago, Nashat Masri, Leith Masri, Farid Asa'di discussed and liked the idea of starting a private equity venture in the Middle East. All of the three founders, who are Ivy League educated, have an extensive background in corporate finance, asset management, mergers and acquisitions, investment banking, consulting, and technology.

The idea became a reality. Foursan is certainly an achiever for a relatively young firm.

A year ago the government in Jordan wanted to use some of the proceeds from privatisations of Jordan Telecom and other entities to invest in, or create, a $150 million private equity fund focused on Jordan. The venture would not necessarily focus on the technology sector in particular but across the board.

Foursan joined with Jordan based Atlas Investment Group and Citigroup to put together a consortium and bid to manage the fund. Although they have not received a formal answer as of yet, analysis in both the Jordan Times and Jordanian Al Rai newspapers indicates the venture capital firm is favourite out of the three entities that have placed bids to manage the fund. Hong Kong Shanghai Banking Corporation (HSBC), and the Arab Bank is one of the bidders and EFG Hermes is the third bidder.

“While there are many companies out there, there is not a combination of good ideas, good management team, and a potential market. We have a good idea of the type of investors in the region and what they want to invest in,” Nashat Masri, a partner at Foursan told ITP.net.

The company has transcended boundaries by concluding several deals. Foursan led the most recent financing round for OneWorld Software Solutions, an Internet services company, and invested in ConnectCapital alongside Microsoft, Insight Capital Partners (one of the largest global private equity investors in enterprise technology companies), i2 Technologies (a leading global provider of enterprise and business-to-business software) and MSD Capital (the personal investment company of Michael Dell, chairman and CEO of Dell Computer).

The company has also invested in CheckSpace alongside Voyager Capital, Northwest Venture Partners and a number of high profile angel investors and it acquired the second largest position in Batelco Jordan, an ISP which came about as a result of a 51% acquisition by the Bahrain Telecommunications Company of two leading Jordanian Internet service providers, First Telecommunications Group and National Equipment and Technical Services. The company and UNext, (a company dedicated to the development and delivery of business training and education via the Internet) are in the process of creating a Middle Eastern joint venture to bring UNext’s offerings to the region and play a role in developing UNext’s global products and services.

“We did not go out and raise money; we modelled ourselves on a deal-by-deal basis and there are practical reasons for that,” said Nashat. The approach is quite similar to an American style VC. But Nashat makes a distinction. “Unlike top tier investment banks which have hundreds of investments and not one investment is extremely important to them, Foursan goes the extra mile and we are willing to roll up our sleeves and have been approached by many entities and individuals to assist in raising equity or structure financing, issues not even related to the scope of technology,” he says.

Foursan does not have a set policy on how it conducts business. It may choose to conclude a deal alone or undertake a partnership. “We only get involved when we can devote a considerable amount of time to a project and when we can add significant value,” explained Masri. “We try to build a put option or other, "guaranteed" exit mechanisms since exit options are limited in the region, or we invest in companies that we believe can IPO outside the region,” added Masri.

The company’s management style and approach to investing goes beyond putting together a pool of investors, closing a financing round. The team at Foursan is more inclined towards forming relationships that provide synergy. “We think of our investors as being partners and adding strategic value themselves. So we try to target big investors with substantial businesses in the region that can help us identify new sources of revenues for companies,” said Nashat. What stands out the most perhaps is that the management at Foursan aligns it self with a philosophy that does not bite off more than it can chew – which according to Nashat is the biggest sin for a VC.

The recent partnership with Atlas Investment Group, a Jordan based regional investment bank, should enable Foursan to leverage the firm’s regional relationships, asset management, and fund-raising experience.

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