Reuters reported that French bank BNP Paribas is launching a USD 300 million private equity fund targeting mid cap companies in the Middle East to benefit from lower valuations due to the global crisis.

Mr Tariq al Samahiji, CEO at BNP Paribas Investment Partners for MENA region said that “Things were expensive a year ago, expectations are lowered now, people are not as high as they were, and they are more sober, more constrained.” He said the bank targets annual returns of 18%to 19% for the fund, some 70% of which will be invested in the Gulf Arab region, with the remainder in North Africa.

BNP Paribas itself will invest USD 75 million in the fund, which it plans to fully invest over the next 3 to 4 years. The Gulf has started to feel the global financial woes through tighter liquidity at banks, and its economies are expected to now grow at slower rates than during the past years' boom. Health care and education, sectors which in the region have lacked private sector investments, are ranking high on the target list of the fund.