AL Qudra Holding's Ain al Fayda, a family recreation centre in Al Ain. The Abu Dhabi company has allocated Dh8 billion to invest in property, hospitality, health care and petrochemicals and other "promising sectors" in the UAE and abroad. Paolo Rossetti / The National
AL Qudra Holding's Ain al Fayda, a family recreation centre in Al Ain. The Abu Dhabi company has allocated Dh8 billion to invest in property, hospitality, health care and petrochemicals and other "promising sectors" in the UAE and abroad. Paolo Rossetti / The National
AL Qudra Holding's Ain al Fayda, a family recreation centre in Al Ain. The Abu Dhabi company has allocated Dh8 billion to invest in property, hospitality, health care and petrochemicals and other "promising sectors" in the UAE and abroad. Paolo Rossetti / The National
AL Qudra Holding's Ain al Fayda, a family recreation centre in Al Ain. The Abu Dhabi company has allocated Dh8 billion to invest in property, hospitality, health care and petrochemicals and other "pro

Business

Alpha Dhabi acquires 25% Al Qudra Holding stake as part of $2.17bn investment push

Abu Dhabi-listed company says Al Qudra is a 'perfect fit' for its growth plans

Deena Kamel
Deena Kamel

January 04, 2022

  • English
  • Arabic

Alpha Dhabi Holding, a subsidiary of Abu Dhabi-listed conglomerate International Holding Company, acquired a 25.24 per cent stake in Al Qudra Holding as part of its strategic investment plan.

The business strategy of the Abu Dhabi Al Qudra makes it an ideal fit for Alpha Dhabi Holding's growth, it said in a statement on Tuesday to the Abu Dhabi Securities Exchange, where its shares are traded.

"Al Qudra’s business strategy is a perfect fit for ADH. This acquisition will add considerable shareholder value as we continue investing in carefully selected industries with sustainable growth potential, as the company is active in unique investment opportunities and has facilitated the development of various projects that meet the local and regional market needs," said Hamad Al Ameri, managing director and chief executive of Alpha Dhabi Holding.

The move to acquire Al Qudra Holding is in line with Alpha Dhabi Holding's expansion plan and future strategy. The company last year allocated Dh8 billion ($2.17 billion) to invest in property, hospitality, health care and petrochemicals and other "promising sectors" in the UAE and abroad.

"ADH has built an Dh8bn investment fund to boost its portfolio by developing, acquiring and investing in companies that reflect our own commitment to both customers and shareholders," Mr Al Ameri said. "Investments like these offer huge potential for adding to our progress and growth in the construction, health care, hospitality, industry, chemicals and investment fields.”

Al Qudra Holding focuses on sustainable development in the region and investing in fundamental growth sectors including real estate, services, hospitality and diversified investments.

Last month, Al Qudra Holding completed the acquisition of Tamouh Investments from International Holding Company with consideration of mandatory convertible bonds worth Dh2.24bn, which will be converted into issued share capital of AI Qudra. Tamouh Investments is a primary developer of key projects in Abu Dhabi, including Marina Square, City of Lights, Fantasy Island and the Royal Group headquarters.

On Monday, Alpha Dhabi Holding bought an additional 17 per cent stake in Aldar Properties after it acquired Sublime 2, Sogno 2 and Sogno 3. The deal brings Alpha Dhabi Holding's overall stake in Abu Dhabi’s biggest developer to 29.8 per cent and significantly expands its property portfolio.

Alpha Dhabi, which has a market value of Dh273bn and was previously known as Trojan Holding, has grown into a regional conglomerate with interests in construction, health care, hospitality and industry after completing a series of acquisitions in 2021.

Living in...

This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home. 

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

While you're here...
UAE currency: the story behind the money in your pockets
Updated: January 04, 2022, 7:42 AM
MarketsAbu Dhabi