Innovations in Islamic Finance 2015: Jadwa Investment
Private equity listings
Abdulmohsen Al Hokair Group and Al Hammadi Company for Development and Investment
The listings of Abdulmohsen Al Hokair Group, a tourism and development company, and Al Hammadi Company for Development & Investment, in June and July 2014, represented the culmination of many years of development anchored on Shariah principles. “These two transactions,” says Jadwa Investment, “represented the culmination of partnerships that were rooted from the outset in best practice in Islamic finance.”
What does that mean, in practice? “In line with Islamic principles, Jadwa supported the owning families and [helped] the shareholder achieve their objectives by sharing responsibility and delivering honest counsel on advice, delivering on promises through partnership,” says the bank.
That’s the point: a shared allocation of both responsibility and risk from the outset.
The result was a successful pair of IPOs. Abdulmohsen Al Hokair’s deal was oversubscribed 11.7 times, Al Hammadi’s over 12; both listed at the top of their valuation ranges, and performed exceptionally well once listed, each one hitting the maximum permitted daily increase of 10% several times over after launch. Again in keeping with shared responsibility and profit, Jadwa has retained a stake of over 20% in each post-offering.