Bahrain's Mumtalakat sees return to profit in 2010

Bahrain's sovereign wealth fund Mumtalakat expects to return to profit in 2010 and is eyeing property investments in the United Kingdom, its chief executive told Reuters Insider on Monday.

"This year should be a profitable year for us, the first half is already looking very good," Talal Al Zain said in an interview in London.

Mumtalakat, which bundles Bahrain's non-oil state-owned companies, is one of the smaller sovereign wealth funds in the world's top oil-exporting region, with $9.1bn in assets at the end of 2009.

The fund posted a $487.2m loss in 2009, compared with a $184.3m loss in 2008, due to losses at its portfolio companies Gulf Air and Aluminium Bahrain.

It plans to divest some of its holdings to diversify away from its local private equity holdings.

Zain said Mumtalakat is looking to buy into more liquid assets such as debt or alternative investments including hedge funds, but is also looking to make real estate investments.

"One of the areas we're looking at on the real estate side is the United Kingdom," Zain said, without elaborating.

Gulf Arab institutional investors have long favoured UK real estate and Qatari property company Barwa Real Estate last month bought the Park House development on London's Oxford Street from Land Securities for about $371m.

Zain said Mumtalakat in the long run plans to own only between 25 percent and 50 percent of its portfolio companies. But he said there were no immediate plans to sell its stakes in National Bank of Bahrain and Batelco. (Reuters)