Al Zain says Bahrain SWF is too focused on specific geographies and private equity
Bahraini sovereign wealth fund Mumtalakat will finalise new investments this year, using the proceeds of the Aluminium Bahrain IPO and other planned divestments to diversify its portfolio.
“Our existing portfolio shows a strong concentration on the asset class – the private equity side – and a strong concentration on geography,” Mumtalakat CEO Talal Al Zain told Arabian Business.
"We are very well diversified from a sector point of view…in order for us to strengthen our portfolio and go for better ratings and stronger positioning in the global market, we need to diversify our portfolio.”
Al Zain did not confirm exactly where the fund was looking to invest, but said it was looking all over the world for opportunities and had “zero prejudice for or against any specific country or region”.
“The proceeds will go into investing, for the time being, more of a liquid portfolio. And when I say liquid, it will be both MENA and global,” he explained.
When questioned whether new investments would take place this year, Al Zain said: “Yes, because on the liquid allocating side, already we have had a lot of discussions with portfolio managers around the globe that we will be directing funds to”.
The CEO indicated that the recent $750m bond issue and the need to pay back borrowers would not shorten Mumtalakat’s investment horizon.
“From a Mumtalakat point of view, we are not leveraged much, and that will continue to be the case,” he said. “Long term, on a holding company level, we will have minimum debt, so we are prudent in our approach.”
Al Zain also said that the company in the Mumtalakat portfolio that was creating his biggest challenge was Gulf Air.
“But it is an exciting challenge. The problems of Gulf Air are really behind us. We have put together a strategy with one of the leaders in the industry – the CEO, Samer Majali,” he said.
“As a representative of Mumtalakat and the government, I’m very excited. The leadership of Bahrain is supporting this company 100% because it’s a major part of our infrastructure.”
The sovereign wealth fund will inject more than $1bn into loss-marking Gulf Air as the carrier looks to shore up its balance sheet.
Earlier this year, newspaper reports suggested that Mumtalakat’s 100% stake in the airline would be shifted back to the government, but Al Zain confirmed that this had not been the case.