Emirates Capital, a Dubai-based corporate finance firm, is considering an initial public offering in two to three years on the Nasdaq Dubai besides planning to set up its own private equity vehicle in Dubai.

Owned by a select group of European private investors, Emirates Capital set up shop in Dubai in January 2008 and initially focused on small and medium-sized firms, including the family-run companies that form a huge merchant class in the Gulf Arab region.

The IPO, company said, is part of its efforts to spur more clients to float. It may also set up its own private equity vehicle in Dubai 'as a piggy back fund' for transactions.'

'Family businesses are looking to grow, their friendly banker is no longer amenable to lend,' said its chief financial officer Michael Huebener at the Reuters Middle East Investment Summit.

The company, which advised firms on the hunt for acquisitions when business was booming, has carved out a niche in leaner times by arranging financing for companies turned away by lending-wary banks.

Huebener said firms now approached Emirates Capital, asking it to 'prepare us, make us beautiful for them.'

'They want to tap into lending networks. Because of this downturn, we're seeing a whole new market opening up which was previously served by banks.'

The company, which has a staff of 10 in Dubai and plans to expand with offices in Singapore and Moscow, could complete four or five deals next year. 'I would say about $50 million to $500 million would be our sweet spot, sometimes a little above, sometimes a little below,' Huebener remarked.

Huebener said its deal pipeline was 'entirely international' when it relocated from Germany to Dubai last year and it has made inroads in the Gulf by capitalizing on a trend in the region to follow the government's lead on investment patterns.

Khuram Maqsood, the firm's managing director, said Emirates Capital expected consolidation in the region's retail sector next year.-Reuters