THE CONDUIT

UAE, Dubai 2015 | HEALTH | INTERVIEW

TBY talks to Faisal Bin Juma Belhoul, Chairman of Amanat Holdings PJSC, on recovering from the oil price drop, new acquisitions, and deploying capital strategically.

Faisal Bin Juma Belhoul
BIOGRAPHY
Faisal Bin Juma Belhoul is a UAE national and the Chairman of Amanat Holdings PJSC and Founder of Ithmar Capital. He was also chairman of a number of business groups and associations, including the UAE Private Hospitals Council, the UAE Private Schools Council, and the Pharmaceutical and Healthcare Equipment Business Group of the Dubai Chamber of Commerce and Industry (DCCI). He is currently a board member of the DCCI by decree from the ruler of Dubai as well as being a member of the Young Presidents Organization (YPO). In 2007, he was recognized as one of the top 100 Executives in the Gulf region. He was educated in the US, where he studied Manufacturing Engineering at Boston University.

How would you evaluate the performance of the IPO of Amanat Holdings?

The IPO of Amanat Holdings was established at the end of 2014, a year that brought an upbeat trend and a lot of optimism in the capital markets, and in the region as a whole. To that extent, it was the right time to launch a company the size and profile of Amanat into the market. After we were approved for listing in 3Q2014, we pursued that opportunity. The Amanat IPO was 10 times over-subscribed, which is a sign of the confidence and faith from the investment community and our backers in the company. Amanat is an investment company that only makes promises it can fulfill.

How did the impact of the oil price drop affect the trading value of Amanat Holdings post IPO?

The price drop was not foreseen by anyone. Given the dependence upon oil in this part of the world, sentiment has further exceeded the reality of what implications this will have; whether that price adjustment is short term or longer term, the sentiment has surpassed the potential implications. As a result, the capital markets have had weak performance. We have witnessed around 35-40% contraction from the pre-oil adjustment to where we stand today in terms of the stock market as a whole. Anything of that magnitude is somehow deemed a crisis, and so in relative terms, the share price of Amanat Holdings has dropped to below the original IPO value, covering between a 10-15% discount. Now, obviously, any negative performance is something that we do not want to see, but relative to overall performance, our share price has outperformed the market.

What acquisitions is Amanat considering, and how do they fit into the company's long-term objectives?

In the strategy document of our prospectus, it states that Amanat's strategy will have a significant emphasis on acquisitions; around 70% of our capital goes to what we define as platform companies. This remains very much our approach. We anticipate announcing one or two investments in 2Q this year, based on current progress. At this time we are quite optimistic that this is achievable. We are choosing the best opportunities we see in the market, and there are actually more deals than we can accommodate. It is really about selecting the ones that fit in terms of profile and appeal.

How does Amanat Holdings' overall strategy reflect the current investment environment within the GCC?

We are fortunate that Amanat Holding was a company that was built from the bottom up. It was a strategy to test on the market and one based on transactable opportunities we could see on the ground; Amanat was created to be the conduit to facilitate those transactions. Our management team comes from a private equity-model background, which is a medium-term partnership model. The team migrated to an outfit like Amanat because the health and education sectors seek long-term partners. Amanat is a company where shareholders have the option to buy or sell, reduce, or increase their ownership at will. No one else in the market can offer this, which gives Amanat access to businesses that would not conventionally entertain private equity capital.

What are your expectations for the coming year?

The current landscape is promising both in terms of supply/demand dynamics, and by the availability to good candidate investment companies. As it stands, the coming three years will be a compelling time for Amanat to deploy its capital in building a quality portfolio. On the back of this, Amanat can move from a phase of active deployment, to a phase of business development for its portfolio companies. Our first phase of investing is through partnering with champion companies. Once we have established these partnerships, the next phase of capital deployment will involve funding the expansion opportunities of partners, both locally and in neighboring markets.