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Tue 4 Mar 2008 04:00 AM

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Going global

Abu Dhabi Investment House is going global with the unprecedented success of its landmark project.

Abu Dhabi Investment house is set to go global following the unprecedented success of its landmark project, the Lagoon development. Diana Milne reports on the opening of the company's Swiss office.

When a company's success has exceeded all expectations and smashed targets in its home country - there is only one way to go and that's global.

When we first launched the fund, we witnessed substantial over-subscription and were confident that the investment would yield strong returns.

Abu Dhabi Investment House (ADIH) has become the latest Arab company to take its business overseas, hoping to emulate the phenomenal business success story it has achieved with its property investment business in the UAE.

Its new Geneva office will cater to Middle East investors in Europe and will attract high net worth investors looking for opportunities in asset management, family office services, portfolio consolidation and cost as well as providing specialist advisory services for real estate and legal transactions.

And judging by the success the company has achieved in the UAE, ADIH's Geneva office is just the start of its expansion outside of the Middle East.

Founded in 2005 as an investment company under the supervision of the UAE Central Bank, the company's net profits had already increased by a massive 375% in its first year.

The company, which has offices in both the UAE and Bahrain, recently announced that it was planning to exit its Lagoon Fund, launched in June 2006 to finance its landmark project, The Lagoon.

The development has yielded a total internal rate of interest which is 21.75% higher than the initially projected IRR of 20%.

This translates into a total return on investment of 30% - 2.5% over and above the expected ROI of 27.5%. The total return on the project amounts to a staggering US$12.6m over the fund's life of just 16 months.

Hopes are high for the continued financial success of The Lagoon development - a commercial and retail property development located on Bahrain's Amwaj Islands and modeled on destinations such as London's Covent Garden and Sydney's Cockle Bay Wharf, which includes eight low rise blocks with sea front views.

The project was 60% contracted within four weeks of its launch.

Rashad Janahi, CEO of ADIH who has 15 years of experience in the banking sector in the Middle East, says of the success of the fund, "When we first launched the fund, we witnessed substantial over-subscription and were confident that the investment would yield strong returns.

"The higher than expected returns signify ADIH's commitment to structuring and exiting top quality deals with long term impact."

"As one of our key focus areas, private equity investment is especially interesting because of the unlimited opportunities available."

It is the unlimited opportunities available in the rest of the world that ADIH hopes to tap into by establishing its operations overseas.

According to Janahi there is a large Middle Eastern client base living in Europe, all with assets to manage and cash to invest in real estate.

ADIH will target those individuals with its services and it will also look for further investment opportunities.

As a first step it has already revealed plans for The Gulf German Residences development - a development consisting of over 15,000 units to be located around Gemany with an investors' annual yield of 10% on a quarterly basis.
Janahi says: "One of the pillars of ADIH's founding philosophy was to ensure that our products and services were easily available to our clients, regardless of their country of residence.

Having established a proven track record over the past few years, ADIH is now ready to launch its international expansion into key markets. The opening of our Geneva office marks a major achievement that is based on many months of strategising.

We have in place a core team which we strongly believe will implement this strategy with professionalism.

"We have put in place a core team which we strongly believe will implement this strategy with professionalism and effectiveness, within the context of a global environment."

Explaining why the company sees so much potential in Switzerland for its business, he adds: "Geneva became attractive, given its reputation in private banking, as well as its strategic geographic location within Europe."

ADIH does not believe it taking things slowly - as the rapid growth of its profits shows.

It opened its Geneva office just four months after announcing its launch.

The branch will be overseen by Dominic Wagner, a licensed investment dealer and former deputy head of trading at the Republic National Bank of New York in Geneva.

And it does not plan to stop at Europe. The company also sees vast potential in the Asian and US markets.

"Our global expansion is not restricted to Europe, as we have existing investments in Asia - which is a very attractive market and could possibly see more ADIH activity, as could America which is has high potential for us as a market," says Janahi.

However he is keen to point out that the company carries out detailed research before deciding to invest in or establish itself in a new market.

"Whenever we are expanding, we are cautious in the way it's done. Conducting due diligence and evaluation, as well as seeking international consultancies when required are all musts before we take a step or make a move."

While the company will be seeking investment opportunities across the rest of the world, its main focus to date has been on large-scale infrastructure and real estate products, with the company having embarked on major projects across the GCC, including Bahrain and Qatar as well as several pan-Arab funds.

Its major projects include the US$3bn Qatar Entertainment City project, which includes villas, apartments and five star hotels just north of the capital Doha.

Other projects it has invested in include Beirut Gate - situated on one of the last areas of unoccupied land in Beirut Central District and made up of eight plots of land.

Energy City Qatar is built over 1.2 sq kms of land and will form the base for regional development and commercialisation of hydrocarbon and above ground energy resources.

Sunset Hills in Bahrain will be an exclusive residential development featuring villas, townhouses and terraced apartments.

In terms of funds for investors ADIH offers the ADIH Saudi Fund and the Al-Arabi Private Equity Fund.

The ADIH Saudi Fund was set up to facilitate investment in Prince Abdul Azeez Bin Mousaed's Economic City in Ha'il, - a development covering an area of 118,332 square kilometers which will be an economic and residential city clustered around an international airport.
The Al-Arabi Private Equity Fund is managed by ADIH for the purpose of investing in a diverse private equity portfolio with a target internal return rate of more than 20% over a five year term.

It will concentrate on the GCC and MENA regions, capitalising on continued growth by taking advantage of low interest rates within the market.

According to ADIH the fund is now fully invested and will soon start harvesting its early investments.

Janahi says he is not put off by the large number of other investment houses in the region with very similar goals and structures to ADIH's own.

He says that his firm is unique in that it is fundamentally still a family firm with strong partnerships and connections throughout the region.

"At the end of the day, partners and alliances are always sought," he says.

"We consider ourselves partnered with the best in the region. It is also something of a family affair. Most of my brothers are in the financial sector," he says, pointing out that his brother Esam Janahi is chairman of Gulf Finance House.

And he says his plans for international expansion will not be affected by the current crises threatening to rock the global financial markets - even when it comes to investing in the US.

"It's a cycle. Now may not be a good time for some banks in the EU or the US, but our business model is different.

"Yes, sometimes there are major forces that cannot be controlled. However we are protective over our investors' investments and try to minimise risk by carefully selecting appropriate products suitable to our investors and their needs."

"Although we offer packages to conservative investors, some investors do seek the higher returns which we satisfy, making sure risks are understand," he goes on to say.

One of the reasons for Janahi's confidence is that he attributes much of the company's success to having such a strong team behind it.

ADIH believes in investing in staff with the best experience and qualifications and in continuing to develop their careers.

"It is our team that continuously builds us excellent results and our belief in them is 100%. We are determined to keep on providing them with the appropriate training and development as this has high returns to the team member on both personal and professional levels."

Just like any good financier Janahi believes in investing now to ensure success tomorrow and in always thinking in the long term. His company's plans extend as far as 10 years down the line - an ambitious strategy by any measure.

Epitomising his company's philosophy, Janahi says: "The sky is the limit."

"We are ambitious. Our thinking is aimed to go as far as 10 years down the line to be able to absorb all the projects and activities we would like to establish and achieve."