MAHA AL GHUNAIM is something of a celebrity in Middle Eastern finance. She chairs or sits on the boards of a string of companies across the region and beyond, including Kuwait’s National Industries Group, Bank Muscat International in Bahrain, Baring Private Equity Asia and Jehangir Siddiqui Capital Markets in Pakistan. Added to that is the fact that she is a woman: something of a rarity in the finance industry even outside the Middle East.
But perhaps her most important achievement came in 1998 in founding Global Investment House, one of Kuwait’s and the region’s largest investment companies.
Al Ghunaim is the managing director and, following the departure this March of Anwar Al Nouri, now the chairperson of this investment company, which from the beginning has striven to do more than just asset management. Indeed, apart from being one of the regions most relied-on brokers, Global undertakes IPOs, private equity and corporate advisory work. In 2005, for example, the firm helped take public Lebanese telecom Investcom in London and Dubai, raising $200 million. It has offices or strategic investments in financial institutions in 14 countries and is listed in Kuwait, Dubai and Bahrain.
Its new buyout fund, for example, which has conventional and Islamic tranches, is closing at the end of this year, and has been the first of Global’s private equity funds to tap US and European demand. It already has four targets on the table, each in the range of $50 million to $70 million, in Oman, UAE, Turkey and Egypt. The aim is for the fund to reach $1 billion, a similar size to Global’s existing buyout funds put together.
Sitting in its humble, even dilapidated, head office in Kuwait City, it is easy to doubt the extent of the firm’s reach. A few blocks away, however, the final touches are being made to a $70 million skyscraper that will become the company’s less cramped home next year.
At 47, the US-educated Al Ghunaim is a fitting face to this still relatively young, unorthodox company. She tells Dominic O’Neill about the challenges and opportunities she has faced in more than 25 years in the Middle East’s financial sector.
Who would you say are Global’s main competitors?
There are very few regional players that provide such a wide range of services as Global. We help companies execute IPOs. We have listed equity funds, GCC funds, international funds, private equity, hedge funds, money market funds, Islamic funds and conventional ones. We have competitors within these business lines. In private equity asset management, for example, there are the likes of the Carlyle Group. On the listed equities side, there is EFG Hermes, Shuaa, and a few of the banks that are launching their own funds.
One of the distinguishing features about Global has been its regional growth. You have operations in 14 countries from Tunisia and Sudan to UAE and Jordan. Where will you go next?
I think what is significant is that we have acquired some very important licences: one in the Kingdom of Saudi Arabia, and the other one in Qatar. They are going to take a lot of attention from us right now. Egypt may also be in the pipeline.
Would you grow organically in Egypt in the same way as you have elsewhere?
Yes. It would be Global Egypt, just like Global Jordan, Global Qatar, and Global Saudi Arabia.
Many global and regional financial firms have acquired licences in Saudi Arabia recently. How will Global find a space?
The local players in Saudi are limited to the banks, and the banks are focusing more on brokerage, and some asset management activities. But investment banking in Saudi Arabia is still not very strong. We have a lot of clients from Saudi Arabia. About 40% of the transaction papers in the private equity funds that we manage come from Saudi Arabian family businesses. That is a very high-penetration rate. So to me Saudi is the most natural extension to our operation in Kuwait.
One of your investment managers told Euromoney that you are the first and only company to have completed a private equity transaction in Saudi Arabia, the biggest market in the Middle East. What does a company need to do to make a private equity investment in Saudi Arabia?
Family businesses are an important part of the GDPs of many Middle Eastern countries, and they are not represented on the stock market. But most of these family businesses are not in need of any more money. You have to show how you can create value to the owners by giving them the expertise and networking opportunities with other businesses. Often they want advice in expanding the business, and crossing geographic boundaries. So we help them to redesign their organizations and their incentive schemes; we appoint the CFO. We get thoroughly involved.
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"With more foreign players arriving to operate here, they have the capacity to pay more, because they have a larger base and they can absorb that cost. They have been bidding aggressively for talent. That is the largest, most important challenge for us today" |
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How has your expansion changed your business?
We started this company with a capital of less than $50 million. Our capital is now more than $2.9 billion. When we started, we had 15 employees. Now we have more than 400, and our assets under management are now more than $8 billion. We are no longer the small, cosy boutique we were when we started out. We are one of the largest investment companies in the region.
What are the barriers to continuing that growth?
Within the region there is competition for talent. With more foreign players arriving to operate here, they have the capacity to pay more, because they have a larger base and they can absorb that cost. They have been bidding aggressively for talent. That is the largest, most important challenge for us today.