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Gulf Capital will invest up to Dh100 million (UK 25M) in a contract staffing firm

Gulf Capital will invest up to Dh100 million (UK &pound25M) in a contract staffing firm as it bets on surging demand for outsourced workers in Abu Dhabi.

The cash will help to fund Reach Group's aim to double its business over the next five years.

"Our investment falls within our strategy of acquiring significant, strategic stakes in well-established, fast-growing companies in the region which are leaders in their own industry," said Karim El Solh, the chief executive of Gulf Capital. "This investment is a strong bet on the future of outsourced business solutions in the region, primarily at the government level."

The investment follows the Abu Dhabi-based private-equity firm buying an 80 per cent stake last month in Reach, a supplier of contract staffing and temporary employees.

Reach is also based in the capital. The UAE staffing market is tipped to grow at an annual rate of 33 per cent until 2015, according to Staffing Industry Analysts. Driving the growth will be greater manpower needs of governments as they spend on infrastructure projects to support the economy.

Last month, the Abu Dhabi Executive Council approved a wide range of projects and expansion plans including the Midfield Terminal for Abu Dhabi International Airport.

Reach said the large list of potential clients as a result of the spending created significant growth opportunities for the company.

Gulf Capital is now working with Reach on a plan to double the firm's business over the next five years.

"This partnership will allow us to consolidate our position in our home market, move into new growth markets and occupy a larger regional footprint," said Malik Melhem, the chief executive of Reach.

The new funds would allow Reach to expand regionally and make "bolt-on" acquisitions, the company said.

Since its launch in Abu Dhabi in 2001, Reach has grown more than 30 per cent over the past five years by focusing on supplying skilled and semi-skilled employees to government and quasi-government firms. By hiring employees directly on its payroll, Reach has tapped into a growing desire in the region to cut costs by hiring outsourced workers rather than employing staff in-house.

During a time of sluggish investment in the regional private-equity industry, Gulf Capital has been one of the few active players in deal making. Last June, it launched a credit fund of up to $300m for the Middle East and Turkey to help to plug a liquidity gap after the global financial crisis.

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