Swiss investment house Vontobel has acquired an undisclosed stake in DIFC-domiciled Arqaam Capital in what appears to be a reversal of the recent investment trend that had so far seen regional firms buying stakes in international companies.
“Arqaam Capital has a well-balanced shareholder base from across the region with some international shareholders such as GLS Capital, in addition to Vontobel, and we are looking at growing this international base further,” Riad Meliti, the chief executive of Arqaam Capital, told Emirates Business.
Arqaam Capital is one of the region’s leading financial institutions in developing derivatives while the Swiss Vontobel is a well-known international player in the structured products market. Together, the two companies plan to introduce new investment products into the region and the Swiss market.
This deal could in effect result in a number of Vontobel’s structured products getting listed on the DIFX.“The two companies are developing derivatives products with plans to potentially list them on the Swiss exchange and the regional bourses.
As the process progresses, more detailed information will be shared with the market,” said Meliti.Vontobel’s investment provides Arqaam Capital with access to the biggest wealth management market in Switzerland and the Swiss Exchange Market.
The co-operation also allows for the joint development of derivatives products from the booming region.The chief executive, however, refused to divulge the financial details of the deal when queried about the percentage or value of the stake that the Swiss company has acquired in Arqaam.
“As this investment is considered a private transaction, we are obliged to protect the privacy of the details of this transaction,” said Meliti.
With the United States economy going into a recession and an imminent slowdown in most European economies, the emerging markets, especially in the Middle East, have been receiving an increasing amount of attention from international players.
“International firms, including Swiss, have recently started looking at the region and making strategic investment on selective basis, teaming up with local institutions not only to tap into their regional networks and established relations, but more importantly for their knowledge of the region and their expertise in the region’s financial systems, structures and regulations,” Meliti said.
“The trend is growing and Arqaam Capital is one of the firms that benefited from this progressive approach towards the GCC markets.”With a paid-up capital of $60 million (Dh220.41m), Arqaam has authorised share capital of $100m.
Meanwhile, Roger Studer, head of investment banking at the Vontobel Group, said: “The co-operation with Arqaam Capital provides the Vontobel Group with easier access to the Gulf as Arqaam Capital is a well-known and respected partner for professional wealth and asset management.”
Meliti said: “Arqaam Capital sees a lot of commonalities and synergies between the two firms and their business models, both being investment houses that focus on derivatives each in its respective market.
Vontobel is the leading investment house in Switzerland and Europe in that respect and Arqaam Capital is the only investment firm in the GCC that structures and trades derivatives on GCC underlying equities as its core business and has a team dedicated and situated in the region.”
Vontobel is one of the top Swiss banks in the derivatives market in Europe quoting more than 5,000 products listed on the major European stock markets such as the Swiss Stock Exchange in Switzerland, Deutsche Börse and Stuttgart Stock Exchange in Germany, and Borsa Italiana in Italy.
Vontobel acquires stake in Arqaam