Ithmar Capital, a Dubai-based private equity firm, is planning to take advantage of the booming appetite for private equity in the Gulf region by raising a record $1bn (€787m) for its third fund.

The fund would quadruple the size of Ithmar's largest fund, which closed above its target at $250m five months ago, and is thought to be bigger than any fund raised by a Gulf private equity firm. However, rivals are targeting billions of dollars as fundraising in the Middle East hits unprecedented levels. Bahrain-based Gulf One Investment Bank is planning to raise a $10bn infrastructure fund on its debut. Ithmar focuses on growth and buyout investments in mid-market companies based in Gulf Co-operation Council countries and also invests, alongside foreign private equity firms, in non-GCC companies with links to the region.