Time: July 25, 2018
Global Investment House, a regional asset management and investment banking firm headquartered in Kuwait, with offices in major capital markets in the MENA region, on Tuesday announced its financial results for the 6 months ended June 30, 2018 reporting a net profit of KWD2.9 million ($9.7 million) compared to KWD 2.7 million ($8.9 million), revenues of KWD7.4 million ($24.5 million) and fee and commission income of KWD4.9 million ($16.3 million), representing 67% of total revenues.
Asset Management generated KWD5.1 million ($16.7 million) revenues and the Asset Under Management (AUM) grew by KWD27 million to KWD937 million ($3.1 billion) stemming from both new money raising and performance driven AUM growth and affected by cash distributions to clients.
On the buy-side, the Private equity asset management team exited two portfolio companies and distributed around $100 million to clients investing in Global Buyout Fund and GMFA and is currently working on two further exits.
The real estate asset management team expanded and diversified its real estate holdings to include Western Europe by acquiring a property in the logistics industry. The team also completed the sale of the first property acquired as part of the UK National Commercial Real Estate Program in September 2015 and let to National Air Traffic Services (NATS), achieving total return of 23.1%, internal rate of return of 10.3% of which the income element represented 9.3% per annum.
Special situations asset management entered into a specialized asset management agreement with a regional group to manage a portfolio worth $90mn.
MENA Asset Management continued to report competitive returns and its managed funds outperformed their respective benchmarks and have been amongst the top performing funds in their respective jurisdictions. The team received two recognitions by industry experts, “Best Kuwait Asset Manager” and “Best Saudi Equity Fund”. In addition, Global Al-Ma’amoun Fund was named best Kuwait equity fund over 5 and 10 years by Lipper Reuters and was amongst the best performing Kuwait equity fund during the first six-month of 2018 reporting 5.8% compared to 1.5% by the respective benchmark.
The Investment Banking team generated KWD0.4 million ($1.4 million) revenues from three M&A mandates in the financial and industrial sectors. The team is currently working on several mandates and has an interesting pipeline of M&A and advisory mandates.
On the brokerage front, Global, through its brokerage arm First Brokerage Company (Oula Wasata), made focused efforts to grow its institutional brokerage business and is well equipped to benefit from the expected increase in liquidity following the inclusion of Kuwait Bourse in the FTSE Russell Emerging Markets index in September 2018. During the six months period, Global generated KWD0.6 million ($2.0 million) in revenues from the brokerage business line.
The company’s continuous efforts to control and rationalize its cost base resulted in a decline of KWD1.2 million ($3.9 million) or 21% in the operating cost base to KWD4.5 million.
Early May 2018 and after months of discussions with several potential buyers, a sales agreement was signed between NCH Ventures, the majority shareholder of Global, and KAMCO Investment Company. Execution of the sale agreement and transfer of ownership is being implemented and once the acquisition is completed, the regional capital markets are expected to witness the rise of a much bigger and stronger regional player with diversified offerings, competent teams, and the largest combined AUM in Kuwait.
Sulaiman Mohammed Al-Rubaie, Deputy Chief Executive Officer and Interim CEO, said: “These financial results are a testimony of the team’s efforts in the successful implementation of the fee-based business strategy focusing on our clients, thus maintaining high quality of revenues. We have successfully closed several transactions, won a number of new mandates and reported positive results.”
He added: “We are working hard to achieve a similar achievement and performance in the next half of the year. Despite significant internal and external challenges we have been facing due to the volatile geopolitical markets and the activities leading to changes in the company’s shareholders’ structure, we are able to surmount these hurdles with a strong and loyal customer base and dedicated teams that make it possible.”
The board of directors met today and approved the financial results for the period ended 30 June 2018 and restructured the board committees following the recall of the reserve board member and former director in the company, Khalid Al-Shamsi, to replace a resigned board member.