Invest AD to attract global investors to the region

Abu Dhabi Investment Company (Adic) said yesterday it would operate under a new brand – Invest AD – and announced the creation of four major investment funds to attract global capital to the UAE and other Arab states.

Officials described the move as a turnaround in the government-owned company's policy and appeared optimistic about the prospects of investment in Middle East and North Africa (Mena) given what they described as an improvement in economic and investment legislation in the region.

Invest AD's top executives said the company would capitalise on such an improvement and on global market changes following the financial crisis to woo world capital to the region in various sectors, including private equity, real estate and banking.

They also said new investors in the Arab World could take advantage of the high growth rate in the region and plans by regional countries to pump $410 billion (Dh1.5 trillion) into infrastructure projects in the next 10 years.

"The message you will hear today is relatively simple – Abu Dhabi Investment Company is taking on a new brand name. But the implications of this name change are more far-reaching," Invest AD Chairman Khalifa Al Kindi told reporters after announcing the company's new logo and strategy.

"In fact, this is yet another indication of the far-reaching changes that are taking place in Abu Dhabi and in the region as a whole. Why do I say this? Historically, this region – and the Gulf in particular – has been characterised by hydrocarbon-based economies. But the dominant economic theme in recent times has been diversification."

Kindi said the region remains committed to the diversification programme and has the advantage of a young growing population.

"Governments are pushing through reforms to unleash markets, removing bottlenecks to international trade, investing in infrastructure, and opening up new areas of growth… in effect, we are using oil to diversify away from oil," he said.

"Abu Dhabi Investment Company today announces a new brand name. Today it is changing. While the firm will continue to invest for the government, the company has an additional mission: to attract local and international institutional investors, and invite them to invest alongside Abu Dhabi Government."

Kindi said the Gulf and other Arab nations have often been regarded purely as a source of capital although the region is one of the most attractive capital destinations. "In fact, phenomenal investment opportunity can be found here. Mena should increasingly become a destination for capital to be deployed by astute fund managers. In essence, our company embodies that vision," he said.

Invest AD Chief Executive Officer Nazem Al Kudsi said the company, which was created in 1977 and is the oldest public investment firm in the region, would focus on institutional investors worldwide to "invest alongside Abu Dhabi Government".

"The new name is a call to action. Most international portfolios are underweight in this region, we want to play our part in rectifying that. We also want to encourage local investors to focus on opportunities in their backyard," he said.

"Invest AD is deeply rooted in this region, has world-class expertise and exercises rigorous corporate governance. This is an attractive proposition for investors to come to this fast growing region," he added.

Kudsi said the Arab World had often been presented in the news as a source of capital but Invest AD believes the region is an attractive destination for capital and is expected to gain momentum in the near future. "The problem is that the region is often under represented because of the new investment vehicles and the limited knowledge of local conditions and partners," he said.

He said Mena would perform better than the rest of the world in terms of economic growth in 2010, as it is forecast to expand by 3.6 per cent against about 1.9 per cent worldwide. Its population is also mostly active groups as nearly two thirds of them are under 40 years.

"Regulations are improving in the region and there are plans to spend nearly $410bn on infrastructure in the next 10 years," Kudsi said. "We have chosen the new name for the company to show we want to attract investors, to signal change and to be distinctive. We will be covering many sectors in our drive to attract capital, including propriety, investment banking, investment funds, brokerage, infrastructure, private equity, real estate, investment management and other spheres."

Kudsi said Invest AD had already created four investment funds for this purpose, including the GCC Equities Fund, a UAE Fund, a Mena Fund and an Emerging Africa Fund. Details of these funds would be announced later, he added.

"This is a new additional mandate to offer exceptional Mena investment opportunities to institutional clients worldwide through Abu Dhabi… a large part of the investment we will attract will be for Abu Dhabi. In order to deliver this new significant mandate, we have been building the company," he said.

Kudsi said Invest AD had managed to attract global capital to the UAE and other Arab countries in difficult conditions. "Now conditions have improved, so we are confident of our ability to attract more capital. Regulations in the region are improving and I think there will be a lot of improvement in the investment climate here in the future. Despite the global crisis, the region remains attractive to foreign capital. Before the crisis, capital flow into this region had also sharply increased due to many factors, including high oil prices, reforms and liberalisation of some sectors."

Kudsi gave no figures, but recent Arab League data showed foreign direct investment hit a record $75bn in 2007 before it was projected to have slowed down in 2008, mainly in the second half, due to the current global financial crisis.

Asked about the impact of the crisis on Invest AD, Kudsi said: "It was among the least affected companies in the region because we have adopted a defensive strategy in the past two years."


Invest ad essentials

Invest AD, previously Adic, is a subsidiary of Abu Dhabi Investment Council. The company was established in 1977 by a decree of the late President Sheikh Zayed bin Sultan Al Nahyan.

After operating for three decades as an investment arm of Abu Dhabi Government, the company recently expanded its activities by offering investment

opportunities to

institutions, including companies, pension funds, wealth managers, banks, insurance companies, investment

platforms and other governments. Its activities cover fund management (asset management, private equity, infrastructure and real estate), brokerage, investment banking, and management of proprietary assets on behalf of Abu Dhabi Government.

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