Company Overview of Gulf Islam Investment
The Gulf Islam Investments (2016) is among the leading financial services organizations in the United Arab Emirates (UAE). Regulated by the Emirates Securities and Commodities Authority, the company strives to provide its customers with a diverse set of unique and duly researched financial commodities for investment (Gulf Islamic Investments 2016).
Its main economic focus is on the financial sector and its industry concentration is on the asset management sector, with a special emphasis on private equity investment (Gulf Islamic Investments 2016). This paper provides an overview of the company’s activities and corporate structure, including an analysis of its main operations, investment types, a record of accomplishments, and investor relations. However, before delving into the details of this analysis, it is important to understand the leadership structure of the organization.
Who Leads the Organization?
People from various departments and fields oversee the activities of the Gulf Islam Investment (GII). These people are shareholders and investors who steer the company’s direction towards undertaking collective investments and pursuing profitable strategic management efforts for its investment activities. At the helm is an elaborate leadership structure that steers such efforts. Headed by H.E. Mohammed Ali Rashed Al-Abbar, the founding chairman of the organization, the company’s people strategy comprises of the board of directors, leadership team, strategic advisors, and placement team, as described in the diagram below
The Board of Directors is comprised of people from all over the Middle East and who have strong business acumen in different economic fields. The quality of the organization’s leadership, headed by the founding chairperson, enjoys immense respect throughout the UAE’s financial world, including the country’s leadership, led by Dubai’s Ruler H.H. Sheikh Mohammed bin Rashid Al-Maktoum. Six directors of the company lead their operations.
They include H.E Mohammed Rashed Alnasri, Hesham Al Emadi, Mr. Ali Abdulla Taha Alkhawari, Mr. Fawaz T. Tamimi, Shk Mohammed Assad Ameen Said, and Mr. Mohammed Al-Hassan. Their decision-making skills are often informed by their financial management and accounting experience in the financial sector. So far, the company has developed a record of accomplishment for managing assets worth more than $2.5 billion (Gulf Islamic Investments 2016). It has also managed to secure $5.5 billion in debt and more than $1 billion in equity (Gulf Islamic Investments 2016).
What is the Company’s Vision of Leadership?
The GII has had more than a decade’s history of advising different types of investors regarding how to make investment decisions in different asset classes (Gulf Islamic Investments 2016). Nonetheless, since 2014, the company’s leadership has mostly focused on undertaking investments that comply with sharia laws. In line with this goal, the company’s vision is to become the pre-eminent sharia-compliant investment organization (Gulf Islamic Investments 2016).
To realize this vision, GII has strived to leverage the competitive advantages of the UAE and the Gulf Cooperation Council (GCC) in the global marketplaces where it operates. It aims to attract and secure adequate capital for investment. By doing so, the company only strives to allocate its investment capital to well-researched projects, with a strong potential of generating positive investment returns for its shareholders.
What does it do?
According to the GII’s website, the company “brings a life-cycle approach to unique, well researched, carefully-structured investment opportunities in private equity, venture capital, infrastructure, and real estate” (Gulf Islamic Investments 2016, p. 1). In detail, the company is involved in six main activities that include deal sourcing and project incubation, due diligence and transaction structuring, advisory services, equity funding, debt funding, active management, and exit management (Gulf Islamic Investments 2016). We discuss these activities in detail as follows
Deal Sourcing and Project Incubation
As part of its role in deal sourcing, GII often looks for great investment opportunities for its clients. However, this approach is not only outward-oriented because the company also undertakes its investment opportunities by leveraging its business partnerships and using its capital resources for the maximization of profits for its shareholders. However, often, the company sources its investment opportunities to provide its customers with the right investment drivers that meet their requirements and needs (Gulf Islamic Investments 2016).
Due Diligence and Transaction Structuring
Most of the investment projects undertaken by GII are done with proper due diligence. In other words, depth and details matter when making investment decisions. Some of the characteristics of its investment decisions include return-enhancing and risk-reducing attributes. The transaction structure of its investments also includes incentive-aligning features. The company also checks the investments to ensure compliance with Islamic principles. This is part of its due diligence process (Gulf Islamic Investments 2016).
Advisory
GII has a wealth of expertise in different fields of investment. It uses this expertise to provide different corporate finance solutions to its clients. Portfolio departments also use the same expertise to develop sound financing strategies. Balance sheet optimization and cost of capital reductions are some benefits enjoyed by GII’s clients through its advisory services. Mostly, these benefits help the clients to resolve temporary liquidity issues (Gulf Islamic Investments 2016).
Equity Funding
As mentioned in this report, the GII has exceptional access to a wide pool of capital. Its shareholders, strategic partners, and investors in the wider Middle East region are the main sources of capital input. Most of the company’s equity financing strategies include capital inputs of more than $10 million (Gulf Islamic Investments 2016). The company can execute such financial transactions in a short time.
Debt Funding
GII has a lot of experience in the banking sector. It leverages such competencies to structure and arrange Shariah-compliant debt services for its clients. Some of the company’s debt financing products include acquisition financing, working capital financing, and project financing. The company also enjoys other term loans and corporate loans from different financial partners throughout the world (Gulf Islamic Investments 2016).
Active Management/Exit Management
Again, through its immense experience in the banking sector, GII prides itself on providing expertise to its customers throughout different investment cycles of new and existing businesses. In this regard, it provides ongoing support to different companies through unique financial and corporate support services, such as strategic management and business and corporate investments. Public offerings, mergers, and acquisitions are also other corporate strategies provided by GII (Gulf Islamic Investments 2016).
What Investments are they engaged in?
GII is engaged in different types of investments, including private equity, venture capital, infrastructure, and real estate investments. We detail these projects as follows
Private Equity
Throughout the private equity spectrum, GII always looks for new investments for its shareholders. The common private equity businesses that the company engages in include expansion capital and buyout. Turnarounds and special situations are also other types of private equity investments recently undertaken by the company.
These types of investments often involve collaborating with strong operators in the financial sector. Domain expertise comes from third-party industry experts and the original management of target companies. However, occasionally, GII brings in new management and collaborates with them. Often, the company strives to structure its investments in ways that would minimize risks and maximize returns for its shareholders. This strategy also involves maximizing the downside protection and best aligning the investment incentives (Gulf Islamic Investments 2016).
Nonetheless, GII always has a bias in the kinds of private equity investments it undertakes because it favors synergistic sectors of business, as opposed to those that do not provide regional synergies in its activities and investment focus. For example, it prefers to undertake investments that capitalize on the underlying growth of the GCC (Gulf Islamic Investments 2016). The underlying growth trends are often in different economic sectors, but the most common ones are industrial, manufacturing, and retail sectors.
Transportation, logistics, health care, education, and renewable energy sectors are also other favorite investment areas for GII. Nonetheless, according to the company’s website, other investment sectors include tourism, financial services, and technology sectors. Most of the investments undertaken in these fields are characteristic of a lifecycle approach to investment. In other words, GII takes an active role in the execution of the private equity investment strategy from the start to the end. Again, the main goal is to maximize shareholder returns.
Venture Capital
GII always looks for opportunities to invest in promising companies, early in their lifecycles. However, it also undertakes the same investments in companies that are already established and have the potential to become global. GII often requires a lot of capital to undertake such projects. Such capital outflows are important in setting up operations overseas, or establishing distribution centers regionally, or internationally. GII also engages in establishing new projects off the ground after thoroughly evaluating an investment idea (Gulf Islamic Investments 2016).
Infrastructure
GII’s investment platform also includes infrastructure investments, which underpin gross domestic product (GDP) growth across the target market. Infrastructure comes as a natural investment selection for GII because the UAE has mostly focused on infrastructure developments to promote economic growth in the last decade. Infrastructure developments also emerge as a natural investment selection for GII because they align with Islamic financing principles.
The main infrastructure categories for investment include transportation and logistics, conventional and renewable energy, touristic infrastructure, social infrastructure, and cooling infrastructure. The Africa Project Development Company is a product of such projects. It provides GII’s shareholders with an opportunity to invest in ongoing infrastructure projects in Africa (Gulf Islamic Investments 2016).
Real Estate
GII has focused on undertaking investments in the real estate sector as a strategy of looking for investments, which have a steady cash flow. Using the same investment driver, the company is also looking for investments, which have high protection for its capital. Part of the philosophy driving investments in this sector is the focus on single-tenant assets with low turnover.
The company has different interests in Real estate assets throughout the Middle East and other parts of the world. Its real estate investment preferences have been in education and the health care sector because they have a strong social impact (Gulf Islamic Investments 2016). The company also prefers to engage in high yield real estate investments where the directors know the tenant. Nonetheless, some of the company’s strategic partners could also finance some of the company’s real estate investments.
Track Record
Historically, people have known GII as the Union National Financial Consultancy and Allied Investment Partners. The founders first established the two companies with the mandate of managing the private assets of the members of the Abu Dhabi Royal Family. However, through its rebranding, to GII, they inherited its record of accomplishments. As mentioned in this report, the company manages $2.5 billion in assets and more than $5.5 billion in debt-raised assets. To understand GII’s record of accomplishment, we investigate three types of transactions as follows
Transactions in Progress
The ongoing transactions of GII include Costa Oasis (Luxury Retail Warehouse), Tadwir, E, and Building materials Company. Costa Oasis is within the real estate asset class and located in Dubai. There is no specified amount of money underlying the investment, but it is open for subscriptions. Tadwir, E is under the private equity investment class and is located in the GCC.
It is a joint venture worth $60 million and opens for subscriptions (Gulf Islamic Investments 2016). The last transaction in progress is the building materials company, which is also under the private equity investment class. The investment type is a buyout worth $19 million and is located in the GCC region (Gulf Islamic Investments 2016).
Transactions Closed
There are different types of transactions that GII has closed under the GII investment portfolio. They include the United States Commercial property, GII Tech Tranche, Airbus Real estate, Staff Accommodation 4, Staff Accommodation 3, More Café, Apttus, Tandem Fund 3, Prysm, and Staff Accommodation 2. These closed investments have varying amounts and are located in different parts of the world (mostly the UAE and America) (Gulf Islamic Investments 2016).
Pre GII Transactions
The Pre GII transactions include the CERT housing project, Tourist Development and Investment Company, Tourist Development and Investment Company 2, Tourist Development and Investment Company 3, Excel by ADNEC, Emaar properties, Trian Partners, and Abu Dhabi Royal Family Member. Other Pre GII transactions include HDFC and Prysm (Gulf Islamic Investments 2016). Collectively, these projects outline ongoing transactions of the GII.
Investor Relations
To explain its investor relations, the GII company website says
“Our team of dedicated, experienced, Arabic-speaking senior investor relations professionals enjoys experience with Gulf Finance House, First Energy Bank, Barwa Bank, Abu Dhabi Investment House, Mena Real Estate Company, Kuwait Finance House, and relationships with thousands of private and institutional investors across the GCC and internationally” (Gulf Islamic Investments 2016, p. 1).
At the center of its investor relations profile is the core group of shareholders who are committed to seed investments. The first outlier comprises of investors with deep pockets and from different economic sectors, including real estate, development companies, and banks. The last outlier contains a vast network of clients and investors.
This network contains thousands of high net worth individuals and institutions (Gulf Islamic Investments 2016). Many corporate investors across GCC regions form part of this network. Members of the GCC ruling families, sovereign wealth funds, private equity funds, and strategic investors also form part of the elaborate investment network characterizing GII’s investor relations.
Summary
The main goal of the GII is to achieve consistent and superior returns on its clients’ investments. By focusing on the financial sector and asset management fields, the main areas of investment are venture capital, infrastructure, and real estate. The company strives to continue offering the best services to its clients, knowing that it has a special role in providing sharia-compliant services for its core customers, as it is their main partner for growth.
References
Gulf Islamic Investments 2016, Gulf Islamic Investments: Your Partner for Growth. Web.