Interview: Mahmood Hashem Al Kooheji
What is Mumtalakat’s overall 2012 investment strategy in the non-oil and gas sectors?
MAHMOOD HASHEM AL KOOHEJI: We play a fundamental role in Bahrain’s economy by fully realising asset value from non-oil and gas state-owned entities, investing in high-growth sectors and entrenching high standards of corporate governance in our portfolio companies. It is essential that our strategy always meets these objectives and takes into account the changing demands of the regional and global economy as well as the opportunities.
Mumtalakat has a portfolio of over 35 companies, currently valued at $8.8bn. We remain in a solid financial position, with our primary focus on actively managing the portfolio of direct investments, protecting and enhancing the overall value of the portfolio, and ensuring Mumtalakat has an appropriate risk exposure. Key assets, such as Aluminium Bahrain, Batelco and the National Bank of Bahrain, continue to perform strongly and offer a positive outlook.
As a sovereign investment entity, Mumtalakat has a long-term investment horizon, but there is need to ensure the optimal balance between the sectors in which we are invested. Ultimately, we will continue to seek expansion opportunities for our portfolio companies, both regionally and in Bahrain. Growth in the MENA region remains an area of strong focus, and Mumtalakat is well-positioned to take advantage of potential opportunities. We are likely to focus on sectors where Bahrain has a competitive advantage, such as downstream industry, manufacturing and services.
How has the downgrading of Bahrain’s sovereign credit rating affected Mumtalakat’s strategy?
AL KOOHEJI: Mumtalakat’s strategy to diversify on several fronts has ensured that it can withstand such potential impacts. As outlined, the diversification objectives with respect to our portfolio and improving Mumtalakat’s overall business profile are priorities. In addition, we will continue to take important steps to diversify our funding sources where required, as we did by accessing the international bond markets in 2010. By adopting the right approach, Mumtalakat now finds itself in the prudent position of not having short-term funding requirements. We do not envisage any additional funding, and our focus is on continuing to reduce the debt profile. Therefore, our strategy and financial outlook remain intact and on track.
As a sovereign wealth fund, what importance is placed on transparency and corporate governance?
AL KOOHEJI: As the Kingdom’s investment arm, our mission is to grow the wealth of Bahrain. In the Sovereign Wealth Fund Institute’s Linaburg-Maduell Transparency Index, Mumtalakat has a rating of nine out of a possible 10, placing it alongside the sovereign wealth funds for Canada and South Korea. Within Mumtalakat and across all of our portfolio companies, we are committed to the highest international standards of corporate governance, ensuring that all our firms are internationally competitive. We fully recognise the key link between strong corporate governance and deriving the best value from our investments and assets.
How would you define the significance of Mumtalakat to the Bahraini economy?
AL KOOHEJI: The people of Bahrain benefit from Mumtalakat’s success because we are about wealth creation, not least through adding value and growing companies that contribute significantly to the economy and boost employment. Mumtalakat is, in essence, the largest private sector employer in Bahrain, if all of its investments are taken into account. We also benefit the economy of Bahrain by attracting investors and global strategic partners who recognise our strengths – our close relationship to the government, our strong credit rating that is tied to the sovereign and our financial discipline and conservative investment strategy. Mumtalakat is committed to maintaining its strong corporate governance and strengthening this across all its portfolio companies.
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