Joint venture at DIFC brings together European expertise and Arab relationships.
A new banking collaboration is hoping that it can bring together the best of both worlds when Middle East meets West.
Bemo Oddo Investment Firm is a joint venture between French investment bank Oddo et Cie and Bemo, a Lebanese/Syrian banking group. Oddo will own 50%, with Bemo Europe and Banque Bemo owning 25% each.
The bank, headquartered in Dubai International Financial Centre (DIFC), aims to combine the strengths of both banking groups.
It will not offer credit facilities, which d'Heliand says gives it a greater degree of independence and means that its integrity is not compromised by having to write research reports on organisations that owe it money.
"We are giving an independent's view," says Ronald Yazbeck, CEO of Bemo Oddo. "We don't have the lending side to give a bias on companies. If we say it's a sell opinion, it's a sell opinion."
One of the major shareholders in Bemo Banque is the Obegi group, and its sister companies are Banque Bemo Saudi Fransi, one of the few privately owned banks in Syria, and BSEC, which led some of the Middle East's first securitisation transactions.
"The Obegi family has many relationships in the Middle East," says Jean-Philippe Tasle d'Heliand, chairman of Bemo Oddo. "Due to this partnership we recognise more than 100 potential clients: tier one, tier two, SWFs, family offices, and trusts. And we have a range of products that Bemo group today has not got in its offering."
One-third of Oddo is focused on securities and it has 60 analysts in Paris which specialise in small to mid cap companies.
"We have the ability to offer a huge range of products in European mid caps with a good track record," says d'Heliand. "Our flagship in midcaps, Oddo Avenir, is offering a 15% compound interest rate for more than 15 years. It's almost the track record of a private equity fund."
A Shariah compliant version of Oddo Avenir is already under development.
Oddo also has a particular strength in advising family-owned businesses in Europe, expertise that is likely to be useful in the Middle East market. "We are very close to listed and non-listed family owned companies," says d'Heliand.
"We think we can provide high-level quality contacts to French corporates who want to be in a relationship with local investors or local partners."
It held its first roadshow in the UAE in March this year, giving local investors the chance to meet top management from some of the largest companies in France's CAC40, and has plans for another in June.
The idea is to give family-controlled companies in Europe the opportunity to access capital from the Middle East, and to allow investors here to gain exposure to Europe. Often, Middle East investors are under-exposed to European assets, which may offer lower returns than can be achieved in the region, but provide a lower risk in a stable currency.
Bemo Oddo wants to demonstrate that it is not merely a representative office and will not suffer from the same frequent management changes as the branches of some international banks in the region.
To show its commitment, some of the senior figures from both groups will join Bemo Oddo at its Dubai base. "We're not here for the holidays," says Yazbeck, "and we're used to the heat."
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