AMR ALMENHALI

Abu Dhabi 2021 | FINANCE | VIP INTERVIEW

TBY talks to Amr AlMenhali, CEO of Waha Capital, on managing risk in the pandemic, government support, and investment prospects for the UAE at large.

What has changed within Waha Capital since the pandemic, and what measures were taken immediately to manage risk?

We have changed the entire company, starting with the main people on the senior team. We introduced new positions for head of corporate and head of compliance. Our strategy has changed, and our people have changed, and we have a new, young, and dynamic team now. The average age of the C-Suite or heads in the company is between 37 and 42, which reflects the health and vision of the company. We have done this without impacting the company's performance. In fact, if we compare the results from 4Q2019 and where we stand today financially, we are in a much better position and are much more resilient. The pandemic had a severe impact across all industries in different sectors and regions, and although Waha Capital was not immune, it was better prepared due to its decision to exit AerCap which released significant investment capital. We made a conscious decision to reduce our debt, which at present is extremely low compared to our equity. As for the management, we brought in a new CFO with experience in different countries like Brazil, Japan, Hong Kong, and the UK. With the new CFO's help, we were able to develop a new strategy for the company. We decided to diversify either the sectors or the regions we were present in. But we will continue to take the same approach, which is to be an active investor. That said, we need to have two types of investments: one that can generate a good multiple in three to five years and one that can generate a high cash yield or recurring income. We used to rely more on investments that would double or triple its value over a period of time. A good example is AerCap.

How would you characterize the government's response, and what support or incentives did you receive?

The government has been extremely serious about this from day one. It has manoeuvred and adapted to all the changes that took place during the pandemic, and it has reflected positively. This is evident from the fact that the UAE has the highest test rate and the lowest death rate. Regardless of the challenges, something that has made me feel extremely proud over the past few months is the USD20.7 billion ADNOC infrastructure deal, which is the largest global energy transaction in history. The fact that it happened during the pandemic summarizes the sheer quality of the UAE's leadership. All the numbers and actions reflect the government's adept approach. Compared to other more mature countries, the UAE managed the pandemic in an extremely efficient way.

Have you adjusted any technology strategies or investment opportunities when it comes to technology and fintech?

These are not new for Waha Capital. We have invested in Channel Vas, a fintech company, which is generating excellent yields for us. In certain countries, we even saw higher demand and revenue because of COVID-19. Since the management changes we made, we have outlined a new business continuity plan (BCP) as of March 2020. We have been able to complete this quickly because of the technology we possess. We fully believe that fintech and digitalization are the future, and we are setting up a robust basis for the company accordingly.

What is your perspective of the healthcare sector? Have you seen any interesting opportunities in that area?

We have not done any new transactions there, though we are evaluating a number of options. We already have a significant investment in Anglo Arabian Healthcare, and the healthcare sector will continue to be a focus for us in the future. Over the summer we spoke to a number of pharmaceutical companies, and they are addressing the high cost of medicine globally while sourcing and developing branded products at competitive prices. In the UAE, we are looking at our own development and forming a strategic partnership with them, probably in the US and Europe. There are a number of possibilities we are looking at. Pharma and biotech ventures will increase in the region in the next few years. If we find the right opportunity, we will jump in for sure.

How do you evaluate the UAE and Abu Dhabi as an investment destination?

The UAE's excellent leadership differentiates it from other regional players. Accordingly, FDI is likely to increase from a business and opportunistic perspective. The rates in the US, Europe and Japan will be nearly zero soon, which means many funds will be looking at investments elsewhere that can generate a good amount of yield. Anything more than 3-4% will be lucrative for them. Percentages like 9% or 10% will be few and far between. Current low rates in the US and Europe will mean that a country like the UAE, with its history, stability, and infrastructure, will continue to be an attractive investment destination in the future. The ADNOC deal is a good example of the appetite that exists for investors to engage here.