January 18, 2021 banking

NBK Capital Partners aims to boost assets to $2bn by 2025


NBK Capital Partners, a subsidiary of Kuwait’s biggest lender, aims to boost its assets under management to $2 billion by 2025 as it looks to launch a new technology-focused investment platform, its senior managing director said.

More investment deals and boosting investments in its existing portfolio of healthcare, pharmaceutical and e-commerce companies, will help nearly double AUMs over the next five years from the current $1.2bn, Yaser Moustafa, told The National in an interview.

'What we’re really excited about is that we think 2021 and 2022 will be [a] really exciting time to be investing capital in the region,' Mr Moustafa said. 'Private equity and private credit – both of these asset classes will be really of interest for those who know what they are doing and [how to] raise capital.'

NBK Capital Partners, an alternative asset manager, runs closed-ended third party investment vehicles that invest in private equity, private capital and real estate.

The company plans to launch its new technology platform within the next 12 to 24 months, 'or possibly earlier', Mr Moustafa said.

'We continue to develop our existing platforms … [but] I think you can see us doing something in [the] technology [sector] within the region,' he said.

'That will be [a] new sector/asset class or a fund, whatever you want to call it, will be the investment theme for us.'

The company has historically focused on consumer sector investments, 'so if you look at technology, it will be consumer focused [such as] FinTech and e-commerce', he added.

The firm currently runs seven funds and is in the process of final closing of its eighth investment fund – a private credit vehicle.

'We already had our first close [of the fund] and we will be making an announcement shortly with a very prominent anchor investor,' he said, declining to give further details.

The company, which has its head office in Dubai’s financial hub, the Dubai International Financial Centre, currently has offices in Turkey, Bahrain and Kuwait. It plans to expand its presence in Saudi Arabia, the biggest regional economy, and the Arab world’s most populous nation, Egypt.

In terms of its existing private equity portfolio companies, NBK Capital plans to inject funds to expand 4Sale International, a Kuwait-based online classifieds sales company, to other markets.

'The business has boomed over the last six months of 2020 to record revenues,' Mr Moustafa said.

It is also looking to channel funds into Morocco’s generic pharmaceutical firm Polymedic, which it acquired in 2019.

'Pharma right now is strategically important in the region. It has been a great performer in the region – all things considered in 2020,' he said. 'We would look to grow that platform as well.'

NBK Capital does not plan to exit any investments in the short term, given the current low valuations of assets.

'If somebody gives us a great price for our technology business we will consider it … but the flip side of low valuations and attractiveness of deploying capital this year, makes it less likely that we will try and push for exits in our PE portfolio,' he added.

Set up in 2005, NBK Capital Partners invests in the six-member economic bloc of the GCC, Turkey and North Africa. It has made about 35 investments and has so far made 17 'profitable exits' returning nearly $700 million in capital to investors, he said.

Mr Moustafa is bullish on the prospects of the private equity market and capital-raising in the region, despite the failures of companies such as Abraaj and Al Masah Capital in recent years.

'Vintage years matter in private equity and private capital around the world, even more so within the region and within emerging markets,' he said. 'I think the vintage years of 2021 and 2022 would be among the best in the history of private capital in the region.'

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