Bahraini firms eye overseas acquisitions to boost assets

Bahraini firms are eyeing deals in Asia and elsewhere to significantly boost their global holding, a senior company executive said.

Mumtalakat Holding, Bahrain's sovereign wealth fund, aims to significantly boost its global holdings, while the country's leading investment banks Arcapita Bank is eyeing deals in Asia and elsewhere.

The comments are reminders that wealthy Arab investors still have an appetite for deal making even as firms struggle elsewhere.

In an interview at the company's headquarters, the chief executive of Bahrain Mumtalakat Holding, said his long-term aim is to increase the fund's international investments to half its portfolio – from about two per cent now.

"I am opportunistic… I am looking at the United States, Europe – both Western and Eastern – and Asia. Wherever… makes sense," Talal Al Zain said.

"I want to build an institution [that is] first in class from an investment point of view, professional [and] 100 per cent transparent."

He declined to say how much available cash the fund had, but put the value of its existing assets at $10 billion (Dh36.7bn).

The two-year-old fund is specifically targeting investments in telecommunications, renewable energy, financial services, hospitality transportation and real estate, Al Zain said.

The fund primarily operates state companies such as national carrier Gulf Air and smelter Aluminium Bahrain, and currently has only one holding outside Bahrain: a minority stake in motor racing company McLaren Group. That could change.

"We are looking at opportunities right now," Al Zain said, including a food company and real estate in "prime cities" in Europe and the United States.

Arcapita Bank is also scouting deals, Executive Director Mohammed Chowdhury said.

The company, which mostly invests on behalf of wealthy Gulf individuals, is actively bidding for a number of assets in Asia, including electricity generation properties in Asia, Chowdhury said. Earlier this week, it announced a deal with Kuwait's Al Imtiaz Investment to build $3.5bn golf course community in Qatar.

Arcapita is also considering adding to its portfolio of American companies, although Chowdhury acknowledged that financing for both buyers and sellers is now hard to come by.

The company already owns a number of household names in the US, including Caribou Coffee and Church's Chicken.

"There are sectors we're still looking at, like health care," Chowdhury said.

"The US is not shut down totally… The big deals have stopped, but where we operate – let's say $500 million to $1bn – investments are still being made."

Gulf-brokered deals are proceeding elsewhere too.

Rachel Ziemba, an analyst at economic analysis firm RGE Monitor, who tracks sovereign funds, said she expects state-owned funds to become more selective in their investments.

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