Abu Dhabi owners chart new course at Shuaa Capital

Jassim Alseddiqi, the chairman of Shuaa Capital, said he expected the investment bank’s assets under management to increase to Dh5 billion by end of this year. Christopher Pike / The National

The new Abu Dhabi-based owners of Shuaa Capital said their strategy to breathe life into the struggling Dubai investment bank would focus on growing assets under its management, leveraging its balance sheet and increasing its business in Saudi Arabia and Egypt.

Jassim Alseddiqi, the chairman of Shuaa Capital, said he expected the investment bank’s assets under management to increase to Dh5 billion by end of this year and Dh9bn by 2020 as a result of the new strategy. Shuaa’s current assets under management stand at Dh1.8bn, he said.

Mr Alseddiqi is also the managing director and chief executive of the Abu Dhabi Financial Group (ADFG), the majority shareholder of Shuaa Capital.

“Shuaa Capital today is in a few different sectors. Our strategy today is nothing out of the ordinary, Shuaa will continue to focus on its capital markets business, on its investment banking business, its asset-management business and its financing business,” he said in Dubai yesterday.

“We have to remember that Shuaa has a track record in being active in these industries and we will continue to pursue these industries, although perhaps in different strategies.”

Mr Alseddiqi said the bank expected to post a profit in the first quarter of this year following several loss-making quarters amid a difficult business environment in the region in the aftermath of the 2014 oil crash.

The chairman said Shuaa was also looking at asset-backed lending for its SME lending arm, Gulf Finance, which has suffered big losses in recent years.

The investment bank will also be looking at acquisitions as it leverages its balance sheet. It is also managing initial public offerings of two property companies in the UAE that he declined to name.

These IPOs are expected this year despite challenging market conditions, Mr Alseddiqi said.

Shuaa has a licence to operate in Egypt but is yet to have a presence there, and is looking at potential cross-border investment banking deals once up and running, he said.

The Dubai Banking Group had in June agreed to sell a 48.3 per cent stake in the Dubai-based investment bank to ADFG.

The banking group’s parent company, Dubai Group, had been under pressure to sell the stake in Shuaa, as well as other assets, to pay back debt to the French bank Natixis.

The Dubai Banking Group did not disclose the amount it was sold for, but Shuaa Capital had a market capitalisation of Dh745.5 million at the time of the sale, making the stake that was sold worth about Dh360m.

Trading in Shuaa shares was suspended yesterday as its board meeting was being held.

ADFG has about US$5 billion in assets under management, including the Metropolitan Police headquarters in New Scotland Yard and No 1 Palace Street close to Buckingham Palace. In February, ADFG raised its stake in the Bahrain-based GFH Financial Group to 10 per cent.

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