Interview: Mahmood Al Kooheji
With Mumtalakat aiming to double its assets under management in the next seven years, what specific areas are you targeting?
MAHMOOD AL KOOHEJI: We are looking to grow our assets both through the development of our existing portfolio and through acquisitions. We have already signed several acquisition deals in the first half of 2015. We look at any opportunity on a commercial basis, and we are looking for companies and management teams that share our values and have room to grow. It is in this area that we can add value, whether through providing long term capital or through our expertise in particular sectors and the GCC market.
In terms of our existing portfolio, we have been very encouraged by the strong performance in 2014. Year on year operating income was up 60% to BD113.1m ($297.9m) driven mainly by strong performances at Alba, Gulf Air, Batelco and National Bank of Bahrain. The strength of the performance reflects the quality of the businesses in our portfolio, the strong growth dynamics of the sectors and markets in which they are operating, and the efforts we have made, alongside management, to restructure and optimise their operations where needed. With a well-diversified portfolio, we are confident that we are in a strong position to thrive in a variety of market conditions.
How is Mumtalakat currently working to enhance Bahrain’s tourism offering?
KOOHEJI: Bahrain has strong opportunities when it comes to attracting investments in tourism. The country already hosts millions of visitors from around the Gulf and beyond every year. Current investments aimed at expanding capacity at Bahrain International Airport and adding a second causeway to Saudi Arabia have the potential to boost these numbers.
Significant opportunities for expansion lie in developing tourism destinations, particularly in the south of the island. Among our investments, we announced in 2015 that Edamah has partnered with Fairmont Hotels and Resorts to develop the Fairmont Bahrain Resort, a 215-room luxury resort. Mumtalakat has also partnered with Desert Adventures, part of Kuoni Destination Management Specialists, to establish Bahrain’s first destination management company.
We have worked closely with both the management of Gulf Air and the government in the restructuring of airline, and the company’s improved performance reflects the success of the plan we are putting in place together – reducing government subsidies and maintaining the long-term viability of an important national asset for years to come.
How has Mumtalakat’s strategy of increasing investment in Europe and the US been affected by the drop in the price of oil?
KOOHEJI: The drop in the price of oil has had no discernible impact on our ability to invest. We do not receive funds from the government and our portfolio is fully diversified away from any reliance on the oil sector. As a result of the revolving credit facility and issuance of sukuk (Islamic bonds), we are confident that we have the capital necessary to make investments, and therefore, we have no current plans to pursue additional funds.
We still envisage strong long-term value within the GCC market as a result of the region’s strong economic fundamentals – its young and growing population, its increasing integration within global trade and the ongoing diversification of the region’s economies. We continue to look at opportunities in Europe and the US where they match our commercial requirements and where they can help to diversify our geographical exposure. In March 2015, our company announced that in partnership with Investcorp we had signed a definitive agreement to acquire Nobel Learning, a leader in providing private education from preschool to high school in the US.
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