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2021 Nov 07

Waha Capital reports 9M’21 net profit of AED 297 mn as funds continue to produce robust returns despite global capital market volatility

  • Public Markets net income of AED 429 mn
  • Private Investments net income of AED 1 mn driven by contributions from Waha Land and the U.S. equities portfolio
  • Cost-to-income ratio (trailing twelve months) of 24.5%

ABU DHABI, 7 November 2021Waha Capital PJSC, an Abu Dhabi-listed investment management company, has reported a strong increase in nine-month net profit, with its emerging markets credit and equity funds continuing to provide robust returns despite volatility in global capital markets.

The company recorded a net profit of AED 297 million in the first nine months of 2021, compared to a net profit of AED 59 million in the same period of 2020. Net profit for the third quarter stood at AED 32 million. The company also maintained an efficient operating model, with a cost to income ratio of 24.5% for the trailing twelve-months.

The Public Markets business, which manages emerging markets credit and equity funds, reported investment gains and fee income of AED 429 million in the nine-month period. The Private Investments business produced a net income of AED 1 million, with the global pandemic and market volatility impacting certain sectors within the portfolio.

PUBLIC MARKETS HIGHLIGHTS

Waha Capital’s emerging markets funds have built an industry-leading multi-year track record of outperformance, successfully navigating market volatility and global business cycles. With over US$1 billion of assets under management (AUM), the business is ranked by Forbes Middle East as a top 30 investment manager in the region.

In early October, one of the company’s flagship funds, the Waha MENA Equity Fund, was recognized by The Global Investment Report as one of the world’s top 50 hedge funds – the only hedge fund based in the MENA region to feature in the ranking. The fund provided a total return of 20.8% in the first nine months of 2021, bringing the cumulative total return to 207.3% since inception in 2014, which is equivalent to an annualised rate of return of 15.6%. The fund’s trailing total return (12 months to end-September 2021) was 32.4%.

The Waha CEEMEA Credit Fund provided investors with a total return of 7.7% in the first nine months of 2021. The fund has delivered a total return of 175.0% since inception in 2012, which is equivalent to an annualised rate of return of 10.9%. The fund’s trailing total return (12 months to end-September 2021) was 13.1%.

The Waha Islamic Income Fund, which invests in Shari’a compliant assets across sukuk and equity markets, produced a total return of 6.9.% in the nine-month period, bringing the investment return since inception to 11.5%.

PRIVATE INVESTMENTS HIGHLIGHTS

Waha Capital appointed Hashem Dabbas in September as Chief Investment Officer of the Private Investments business to oversee restructuring of the portfolio and to drive a new strategy with a global investment mandate.

Dabbas, a former investment banker at Morgan Stanley in New York who joins Waha Capital from the Abu Dhabi Investment Council, will develop and manage two portfolios within the Private Investments business: “Core” and “Global Opportunities”.

The Core portfolio will target stable, cash-generative assets within the MENA region. In this portfolio, Waha Capital will look to take controlling or significant minority stakes in businesses led by best-in-class management teams with established track records, in sectors underpinned by strong tailwinds and growth trends. As a permanent capital investor, Waha Capital is uniquely positioned to compound returns by partnering with businesses for longer investment horizons and through market cycles.

The Core segment is complimented by a Global Opportunities portfolio; with a fully flexible, opportunistic global mandate that will target investments in the alternatives space with high risk-adjusted returns. Waha Capital will look to partner with likeminded institutional investors in this investment strategy that is agnostic to sector, geography, asset class and capital structure.

During the third quarter, the divestment of Waha Capital’s stake in Deem Finance was completed. The company’s real estate subsidiary, Waha Land, continued to generate steady income from its light industrial assets, which are 95% occupied, while holdings in listed companies and a U.S. securities portfolio registered negative mark-to-market performances due to volatility in global markets.   

H.E. Waleed Al Mokarrab Al Muhairi, Chairman of Waha Capital: “Waha Capital has continued to develop a world-class investment management business, despite a challenging global operating environment this past year, marked by the lingering impact of the pandemic on many economic sectors.

The company benefits from a strong balance sheet and a robust governance structure that provides confidence not only to shareholders but also to business partners, and third-party investors.

On this solid platform, Waha Capital has built an industry-leading Public Markets business that continues to gain global recognition for differentiated fund strategies and consistent market outperformance. The Private Investments business is also strengthening, with an experienced investment team now in place that will leverage international business networks to deploy capital in an agile manner.

Waha Capital’s balanced and well diversified business is well placed to create long-term shareholder value through market and business cycles.”

Ahmed Khalifa Al Mehairi, Chief Executive Officer of Waha Capital: “Waha Capital has delivered a solid return during the first nine months of this year, successfully navigating a tough global macro-economic environment and increased capital markets volatility in recent months. 

The Public Markets business has grown to over US$1 billion in assets under management, with each of our investment strategies continuing to produce attractive returns for the company and our third-party investors. The business is deservedly receiving global recognition again this year, as a leading emerging markets investment manager, with the Waha MENA Equity Fund recently ranked among the world’s top 50 hedge funds.

We have also taken decisive steps to build a strong Private Investments business, bringing on a new team led by Hashem Dabbas, a highly experienced investment professional, to restructure our portfolio and redeploy capital into new global opportunities.

Waha Capital’s positive financial performance this year reflects our successful transition from implementation of a turn-around strategy to a new phase of growth.”

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