The happy wanderer

Yousef Al Essa spends a lot of time in the air. We meet at the end of a week when Addax Investment Bank's CEO has made whistlestop trips to Bombay, Singapore and Dubai. Tomorrow, he will shuttle back to Bahrain, and company headquarters, for a well-earned respite. Typically, though, Al Essa puts a positive spin on his travels.

"Having exposure to different markets definitely enriches you, for sure," he insists. "That's probably one of the positives of being in a place like Bahrain, where the local economy's quite small - it forces you to think regional.

"If I were based in Saudi Arabia, or even Kuwait or Abu Dhabi, you're much more focused on your home market, because it's a big market and there's a lot of things you can do, and a lot of people that can give you money and so on," he continues. "However, you'll notice pretty much every deal we've done is a regional play, and this is becoming a trend."

Addax has certainly made its mark region-wide. Last year, the bank reported a 265% growth in profits and its return on average capital employed during 2006 was one of the highest in the industry. With an authorised capital of US$100m, the bank has been involved in a number of high profile deals in the region.

Chief among these include participation with Dubai International Capital and other lead investors in creating JD Capital, a US$300m company targeting investment opportunities in Jordan. Addax was also responsible for the structuring and placement of the US$150m deal to finance 20 ‘Express by Holiday Inn' hotels across five countries in the GCC, and a US$1bn investment fund, the MENA Serviced Residence Fund, in collaboration with The Ascott Group of Singapore, to acquire and manage a chain of serviced residences throughout the Middle East and North Africa.

"Overall, we're investing a lot in businesses that provide basic services - niche products like budget hotels and serviced apartments - things that other banks are not necessarily doing," Al Essa explains.

"The others are doing these mega-development projects, for example," he continues. "Some of them might do very well if it's in the right location and with the right price, but restaurants, education and some of the other things we've done are fundamental requirements.

"You have to be patient, and hold on to your investment for three to five years, but as long as it's fairly well-managed, you will succeed because you're not jumping on any kind of bandwagon."

Al Essa points to the region's recent stock market corrections as a case in point. The climate has changed, he explains, and the unhealthy short-term planning that to some extent characterised the boom years has been replaced by a far more controlled approach to investing.

"Even companies in industry were just putting their money in the stock market and making their earnings out of that, and it just wasn't healthy," he recalls. "It's a lot harder now, even as an investment bank, to make profits. You have to really create real value.

"I like to think that we stick to the fundamentals very well, in that it's a product that, whether the market is up 50% or down 50% that year, will still do well," he continues. "There's a real general need for whatever we're selling. We always put our money where our mouth is, we always co-invest, and in fact we put in our money before their money goes in."

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