READY FOR GROWTH

Kuwait 2018 | FINANCE | INTERVIEW

TBY talks to Faisal Mansour Sarkhou, CEO of KAMCO, on signs of growth potential and regional expansion in asset management investment banking.

Faisal Mansour Sarkhou
BIOGRAPHY
Faisal Mansour Sarkhou was promoted to lead KAMCO as CEO in 2014 after heading the Financial Services and Investment Division since 2010. Also, he led the Corporate Finance Department from 2006-2010. He has extensive experience of over 18 years in investment banking, asset management, and financial products as well as financial services. He serves as a board member for several companies and funds, and he sits on numerous management committees. Most notably, he is a board member and treasurer at the Union of Investment Companies in Kuwait. He is an economics graduate with honors from the University of Birmingham, UK, and holds an EMBA with distinction from HEC Paris, France.

What is your role in the finance business in Kuwait?

We consider ourselves one of the leading asset management investment banks in Kuwait with assets of USD10.4 billion as of December 31, 2016; we are an extremely client-centered business with a focus on enhancing returns from the financial sector. On the asset management front, we manage our clients' wealth in different asset classes and categories such as active, passive, funds, portfolios, and so on. In the investment banking space, this is where we do deals, no matter if they are capital market transactions, including equity capital markets, IPOs, placements, strategic investments, or debt capital markets. We are one of the top lead managers for bond issuance in Kuwait, in addition to being active in other parts of the region. Recognizing our market leading position on this front, we won the prestigious title, “Middle East Sukuk Bookrunner of the Year 2017" by Mergermarket as well as the Best GCC Investment Banking Co. 2016 award from World Finance. The third element in investment banking is advisory services, which are basically focused on M&A, including selling or buying for a client, restructuring, merging, and specific advising for these clients.

What are the objectives of your recently opened regional office in Dubai?

When we started, the business was centered in Kuwait. However, as the business grew we discovered that our abilities could be exported beyond Kuwait into the region; therefore, we started launching products that are regional and investing on behalf of our clients on a regional basis. We are comfortable enough to establish a regional presence to also introduce investors to the Kuwaiti market and to some of our regional and international products. Therefore, the purpose of the Dubai office is to grow our reach; it will grow our business under the Dubai International Finance Centre.

How do you see the market evolving in the near future in the region?

We always look at our market as a young market; the ratio of equity market capitalization of Kuwait compared to its GDP is one of the lowest in the region. This is the same case with the debt market ratio, which is also one of the lowest regionally. The region has potential for significant growth in professional asset management and investing banking, and these two come with increased regulation, transparency, requirements for growth, and funding. The job of capital markets is to help companies grow because, as they grow, they need more funding, which comes from internal or external resources, and companies like KAMCO help with the funding of these businesses. We are optimistic about the region with Kuwait being the best-performing market in the GCC, boasting a YtD 2017 return of 14%.

What are your expectations for the year ahead?

I am more optimistic for 2018 than I was for 2017. The changes in our equity capital market will have a positive bearing on investor confidence, and banking should continue to grow along with insurance businesses. Apart from being the best-performing market in the region, corporate profits continue to grow, with 1H2017 profits of Kuwaiti listed companies up by 12%. In addition, the opportunity is also highlighted by the IMF in its latest World Economic Outlook showing Kuwait as the best performing economy in the GCC in 2018 with an expected GDP growth rate of 4.1%. Government success in executing more projects will be key; there are plans to involve the private sector more, though my only concern is the speed of change. Nevertheless, I expect 2018 to be a positive year, in line with expectations of a stronger GDP growth.