Invest AD attracts first US$100 million to UAE equities fund

Monday, 06 Jul 2009
Category: Finance & Insurance
Countries: United Arab Emirates
Description: Invest AD has attracted over US$100 million to its newly launched UAE Equities Fund from institutional investors, reflecting rising interest in Middle East and North Africa markets.
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Invest AD has attracted over US$100 million to its newly launched UAE Equities Fund from institutional investors, reflecting rising interest in Middle East and North Africa markets.

The company launched the fund to invest in the United Arab Emirates’ stock markets last month, when it adopted a new name, “Invest AD”, to reflect its fast growing role as a manager of third-party money.

Invest AD, created as the Abu Dhabi Investment Company in 1977 originally to invest on behalf of the emirate’s government, has built up strong investment management, private equity, real estate, infrastructure and investment banking teams to serve global clients.

“International investment portfolios are often seriously under-weighted this region,” said Invest AD Chief Executive Officer Nazem Fawwaz Al Kudsi. “This is usually not a matter of strategy, but a result of a lack of good research and limited access to the market. Our funds can help to redress that imbalance.”

The commitments to the UAE fund come at a time of rising interest in stock markets of the United Arab Emirates (UAE) and other Gulf Cooperation Countries (GCC), said Mohammed Salih Al Hashemi, head of investment management at Invest AD.

“UAE stocks are undervalued, and international and local investors see opportunity,” Al Hashemi said.
UAE stocks are trading at about 7.8 times earnings, compared to about 14.5 times for emerging markets, and an average 17.5 times for global stocks.[1] They are also trading at a slight discount to book value, while emerging market and global stocks are on average priced at over 1.5 times book value.

As well as the UAE fund, Invest AD launched this month a GCC equities fund, a Middle East and North Africa (MENA) equities fund, and an emerging Africa equities fund – to tap outperforming economies benefitting from heavy infrastructure spending and fast growing, youthful populations.

The UAE has three stock exchanges: The Abu Dhabi Securities Exchange, Dubai Financial Market, and NASDAQ Dubai. Abu Dhabi’s ADX General Index was up 10.6 percent this year while Dubai’s DFM General Index was up 7.7 percent, as at midday on July 5, 2009.