Abu Dhabi healthcare provider Burjeel Holdings raised more than Dh1.1 billion ($300 million) from the sale of an 11 per cent stake sale in the company's initial public offering.
The IPO drew strong demand from investors in the UAE and the region, and was more than 29 times oversubscribed. Total gross demand was more than Dh32 billion ($8.7bn), the company said on Wednesday.
The company sold more than 550.7 million shares at the lower end of its offer share price of Dh2. Burjeel’s market capitalisation upon listing is expected to be about Dh10.4bn, making it one of the largest private healthcare companies on the Abu Dhabi Securities Exchange by market value.
Its shares will begin trading on October 10 under the symbol “BURJEEL”. VPS Healthcare Holdings will continue to own a 70 per cent stake in the company after the listing.
Burjeel Holdings, founded in 2007 by Dr Shamsheer Vayalil, has a network of about 61 assets, including hospitals and medical centres, as well as pharmacies and other allied services throughout the UAE and Oman.
The company plans to enter Saudi Arabia, with investments of up to $1bn planned in the Arab world’s largest economy through joint ventures and public-private partnerships.
“The strong demand for the IPO … reflects the high-quality investment opportunity provided by Burjeel Holdings, built around our clear clinical vision and our strong growth trajectory in the Mena region,” said Dr Vayalil.
“The offer price reflects our desire to prioritise a supportive aftermarket performance post-listing.”
On September 19, Abu Dhabi’s International Holding Company, the UAE’s largest company by market value, bought a 15 per cent stake in Burjeel.
Burjeel had revenue of about Dh3.4bn in the 2021 fiscal year, representing an 18 per cent compound annual growth rate from 2019 to 2021.
The company plans to pay cash dividends from 2023 onwards, on the expected basis of a payout ratio of 40 per cent to 70 per cent of net income, depending on the required investment for additional growth plans.
In the absence of attractive investment opportunities, it will distribute dividends at the upper end of the payout ratio range or potentially higher, it said.
The first interim dividend is expected to be paid in the second half of 2023 on the basis of net income for the first half of 2023.
Dubai Islamic Bank acted as the lead manager in the IPO while First Abu Dhabi Bank was lead receiving bank and International Securities acted as financial adviser.
BHM Capital Financial Services was listing adviser while JP Morgan acted as capital markets adviser to the company and selling shareholder.
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.”
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Monday, 1st 50-over match
Wednesday, 2nd 50-over match
Thursday, 3rd 50-over match
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Power: 275hp at 6,600rpm
Torque: 353Nm from 1,450-4,700rpm
Transmission: 8-speed dual-clutch auto
Top speed: 250kph
Fuel consumption: 6.8L/100km
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England 69 (3) beat UAE 63 (1)
Australia 124 (4) beat UAE 23 (0)
New Zealand 74 (2) beat England 55 (2)
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Engine: 3.5-litre twin-turbo V6
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Torque: 530Nm at 1,300-4,500rpm
Transmission: Eight-speed auto
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Name: Qyubic
Started: October 2023
Founder: Namrata Raina
Based: Dubai
Sector: E-commerce
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Investment stage: Pre-seed
Initial investment: Undisclosed
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Torque: 350 and 360Nm
Transmission: eight-speed automatic
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