Gulf capital, defined: the terms that come up in a raise

Government-related entity (GRE). A company or investment vehicle owned or controlled by a Gulf state, often with a specific economic purpose. Gulf banks typically prioritise large corporates and GREs when lending, which leaves smaller borrowers to look elsewhere.

Family office. A private organisation that manages the wealth, investments and often the wider affairs of a family. In the Gulf, family offices are among the most active backers of Western mid-market businesses. UBS's Global Family Office Report 2026 found that Middle East family offices allocate 50% of their portfolios to North America and 18% to Western Europe, from a small regional sample.

Single family office. A family office that serves one family only. Decisions tend to rest with a small number of family members and senior advisers, so relationships and trust carry considerable weight, and the person who attends the first meeting may not be the person who decides.

Multi family office. A firm that manages the wealth of several families under one roof, sharing investment teams and costs. It may pool capital or invest separately on behalf of each family, so it is worth asking early which applies to a given opportunity.

GCC. The Gulf Cooperation Council, a regional union of six states: Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Bahrain and Oman. The term is often used as shorthand for the Gulf as an investment region, though practice differs between markets and between investors within each one.

Vision 2030. Saudi Arabia's national programme for economic diversification. One of its targets is for SMEs to receive 20% of bank lending by 2030; in 2024 the figure was 9.4%, according to official data reported by Arab News.

DIFC. The Dubai International Financial Centre, a financial free zone in Dubai with its own common-law legal framework and an independent regulator, the Dubai Financial Services Authority (DFSA). It introduced a dedicated framework for credit funds in 2022.

ADGM. Abu Dhabi Global Market, the financial free zone in Abu Dhabi. Like the DIFC it applies a common-law framework, with the Financial Services Regulatory Authority (FSRA) as its regulator. It issued Private Credit Fund Rules in 2023, and its assets under management rose 54% year on year in the first half of 2026.

Mandate. A word with two uses. It describes the instruction a company gives an adviser to run a raise, and it describes an investor's own remit: the sizes, sectors, instruments and geographies it may invest in. Checking an investor's mandate before any approach saves both sides time.

Ticket size. The amount a single investor typically commits to one transaction. A company raising a modest sum will rarely suit an investor whose minimum ticket is larger than the whole round.

Growth equity. A minority equity investment in an established, growing business, used to fund expansion rather than to buy out existing owners. Gulf family offices often take minority growth stakes with information rights attached.

Private credit. Lending by non-bank investors, negotiated privately and usually held to maturity. Moody's puts the global market at about US$1.8 trillion and the GCC market at around US$6 billion, which is why much Gulf credit appetite is expressed through managers abroad.

Senior and junior debt. Senior debt ranks first for repayment and is usually secured. Junior debt, sometimes called subordinated or mezzanine debt, ranks behind it and is priced higher for the extra risk. Existing lenders often need to consent before junior debt is added.

Asset-based lending. Lending secured against specific assets such as receivables, inventory or equipment, and sized by reference to their value. It can suit businesses with substantial assets but uneven profits.

Covenant. A promise in a loan agreement, for example to keep debt below an agreed multiple of earnings or to deliver monthly accounts. Moody's has stressed the importance of strong covenant protection as more capital enters GCC private credit. Covenants should be set with sensible headroom.

Convertible. A loan or note that can convert into equity on agreed terms, often at the next funding round. It defers the valuation discussion, but it is interest-bearing in conventional form and so may not suit investors who require Shariah compliance.

Placement agent. An adviser that introduces a company or fund to suitable investors and helps run the raise. Where an activity requires regulatory authorisation, it should be carried out by, or with, an appropriately authorised party.

Teaser. A short document, often one or two pages, that outlines an investment opportunity without giving away confidential detail. Its purpose is to establish whether an investor wants to see more, so it should make sense without a covering explanation.

Non-disclosure agreement (NDA). A confidentiality agreement signed before an investor receives detailed information. Agreeing a standard form in advance avoids weeks of legal exchanges with each investor.

Information memorandum. The main offering document in a private raise. It describes the business, its market, management, financial performance, plans and the proposed transaction, and is usually shared after a confidentiality agreement is signed.

Use of proceeds. A clear statement of how new capital will be spent. Investors test it against the financial model, and vague answers are among the most common reasons a process slows.

Data room. A secure online folder where a company places the documents investors need for diligence, such as accounts, contracts, corporate records and the financial model. A complete, well-organised data room shortens a process considerably.

Term sheet. A short document setting out the main commercial terms of an investment, such as valuation or pricing, governance rights and conditions. It is usually not binding on the investment itself, although some clauses such as confidentiality or exclusivity may be.

Information rights. The contractual right of an investor to receive regular financial and operating information. Minority Gulf investors commonly ask for them, sometimes alongside a board or observer seat.

Engagement fee. A fee paid to an adviser for work on a mandate regardless of the outcome. It pays for preparation and process work, and in some structures it is credited against the success fee if the raise completes. It is never a payment to release funds, and any such request is a warning sign.

Success fee. A fee paid to an adviser when a transaction completes, calculated by reference to the capital raised. It aligns the adviser's reward with the outcome the client wants.

Co-investment. An investment made directly into a company alongside a lead investor or fund, usually on the same terms. Gulf allocators often value co-investment rights as part of a wider relationship with a manager.

Anchor commitment. A large early commitment from a single investor that gives a fund or raise credibility and helps attract others. Anchors may negotiate improved terms in return. PIF, for example, anchored NBK Capital Partners' Shariah-compliant fund at first close in 2021.

First close. The first point at which a fund or raise accepts binding commitments, with later closes following. Janus Henderson's Shariah-compliant MENA private credit fund held its first close at US$125.5 million and had raised US$191 million by its second close, against a US$300 million target.

Origination partner. A lender or manager that finds and structures loans which a larger investor then funds directly. Mubadala built a US$25 billion credit portfolio alongside 14 origination partners.

Shariah-compliant. Structured in line with Islamic principles, which prohibit interest (riba) and exclude certain sectors such as alcohol, gambling and conventional interest-based finance. Compliance is usually overseen by a Shariah board or adviser, and it needs to be designed in from the start.

Purification. The process of giving away income that a Shariah board judges non-compliant, usually to charity. Investors who follow Shariah principles may ask how any such income would be identified and reported.

Sukuk. Islamic certificates, often described as Islamic bonds, that give holders a share in underlying assets or a venture rather than a claim to interest payments. According to the Islamic Financial Services Board, outstanding sukuk passed US$1 trillion for the first time in 2025.

Murabaha. A cost-plus sale used in place of a conventional loan. The financier buys an asset and sells it to the borrower at cost plus a disclosed, fixed profit, payable in instalments. The return is a trade profit rather than interest.

Ijara. An Islamic leasing contract. The financier owns an asset and leases it to the client for agreed rental payments, sometimes with ownership passing to the client at the end of the term.

Escrow. An arrangement in which a neutral party, usually a bank or law firm, holds funds until agreed conditions are met. Any escrow should be agreed by lawyers on both sides. An adviser that asks to hold investor money itself is a warning sign.

Know your customer (KYC). The identity and source-of-funds checks that banks, advisers and counterparties carry out before a transaction. Gulf investors will expect them, and will carry out their own on the company and its owners.

LEI. A Legal Entity Identifier, a unique reference code under a global standard that identifies a legal entity taking part in financial transactions. Banks and counterparties may request it during onboarding.