EIIB said the deal was a “first step” in building a strategic partnership with Rasmala, which focuses on asset management, investment banking, brokerage and research.
Rasmala was one of the first regional investment banks to be licensed by the Dubai Financial Services Authority, and has subsidiaries in the UAE, Saudi Arabia, Egypt and Oman.
The firm serves a range of clients, including governments, companies, family offices and high net worth individuals. It employs some 140 people in the region, said EIIB.
Zulfi Caar Hydari, chief executive of EIIB, said: “Rasmala has a strong regional franchise, and together with EIIB’s international capital markets and asset management experience this will be a powerful partnership to seize current opportunities in the GCC.
“The GCC is growing in importance as an economic and trading hub as its overall GDP is expected to reach $2trn in less than ten years.
“Our goal as a public company is to give international investors exposure via a London-quoted vehicle to this fast growing region which provides nearly one-quarter of the world’s oil supplies."
According to EIIB, Rasmala expects to post a loss (before interest, tax, depreciation, amortisation and restructuring) of $7m for the financial year ending December 2011. However, it has undertaken “cost reduction initiatives” which should improve performance this year, EIIB said.
The transaction, which will be funded from money released by EIIB’s closure of the Turath Quoted Equities Fund in 2011, will see the firm invest $16m in Rasmala over a 12-month period and take a “leading role” in its management. It has also acquired a 7.4% stake in the company.
EIIB added that it will continue to participate selectively in consolidation opportunities in the Middle East financial services sector, via organic growth, joint ventures and acquisitions.
